HOUSTON: Oil prices jumped $3 a barrel on Monday as OPEC+ considered output cut to buttress prices. Brent crude futures for December delivery rose $2.99 to $88.13 a barrel, a 3.5 percent gain. U.S. West Texas Intermediate crude rose $3.33, or 4.2 percent, to $82.82 a barrel.
Oil prices have declined for four straight months since June, as Covid-19 lockdowns in top energy consumer China hurt demand while rising interest rates and a surging U.S. dollar weighed on global financial markets.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, is considering an output cut of more than 1 million bpd ahe While prompt Brent prices could strengthen short term, concerns about a global recession are likely to limit the upside, consultancy FGE said.
"If OPEC+ does decide to cut output in the near term, the resultant increase in OPEC+ spare capacity will likely put more downward pressure on long-dated prices," it said in a note on Friday.