Oil prices were stopped on their way above a five-month high after Russian comments are signalling a lack of support in extending the OPEC+ production cut agreement. The Saudi led initiative to bring stability to oil prices after the free fall caused by oversupply, got traction when Russia and other producers joined the deal in 2016.
Russian President Vladimir Putin said earlier today that while ready to continue to cooperate with OPEC, Russia does not support an uncontrollable rise in oil prices and current prices suit Moscow. The production cut agreement has been the biggest factor adding stability to prices, but lately supply disruptions due to geopolitics have spiked prices higher urging Russia to wonder if the deal has run its course.
The OPEC+ ministerial meeting in June will be key as revenues have been capped in the nations participating in the agreement, and some like Russia have begun to signal that they are ready to reassume their previous levels of output.
US sanctions against Venezuela and Iran alongside military action that could end up in a civil war in Libya have taken crude to break key levels while combined with the production cut agreement.
US shale production has been ramping up and has made America a net exporter so if the OPEC+ fails to extend the deal and global production rises oil could be facing strong downward pressures with oversupply concerns once again cropping up.
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