Crude Oil Prices Surge As OPEC+ Adopts Plan For Establishing 2027 Quotas Ahead Of July Review

Crude oil prices rallied more than 2% on Wednesday as OPEC+ announced that it has adopted a plan for establishing output quotas for 2027, ahead of a July review.

According to a CNBC report, OPEC+ has also agreed to reaffirm the crude oil production levels for OPEC and non-OPEC participating countries, as agreed upon during the December meeting of the alliance.

At the time of writing, U.S. West Texas Intermediate (WTI) crude futures were up 2.18% to $62.22 per barrel, compared to the previous closing price of $60.89.

Brent crude futures surged 1.62% to $64.60 per barrel.

Wednesday’s surge in crude oil prices comes after OPEC+ –which includes the  Organization of the Petroleum Exporting Countries (OPEC) and its partners such as Russia–announced that it has tasked OPEC with formulating a plan to assess each country’s maximum production capacity, according to a Reuters report.

This would be used as a reference for 2027 baselines for all countries.

The surge in crude oil prices also comes at a time when the U.S. and Iran are currently undertaking nuclear talks. If successful, this would result in Iranian oil supply hitting the markets, helping reduce the pressure on prices. On the contrary, a failure would put upward pressure on prices.

The OPEC+ is also expected to announce a third consecutive hike of 411,000 barrels in July – it had hiked output by these levels in May and June.

A Bloomberg report said that analysts at Morgan Stanley also expect a 411,000 barrels per day surge in output in July, in line with the expectations of the analysts at RBC Capital.

The United States Oil Fund LP (USO) rose 1.63%, while the ProShares Ultra Bloomberg Crude Oil (UCO) surged 2.23% at the time of writing.

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