Commodities: WTI surges even as OPEC signals increased output
A big bounce in crude oil futures drove a small bounce in the larger commodities complex at the end of the week.
West Texas Intermediate crude oil futures for next month delivery jumped 5.45% to reach $69.11 a barrel on NYMEX, recovering roughly half the distance to their 52-week highs of $72.70 a barrel in just one go, even as the Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, announced a deal to increase their combined output.
Earlier, Saudi Energy Minister Khalid al-Falih had reportedly said that the cartel had agreed to a 1.0m barrel a day hike in its production of crude.
However, the fact that some OPEC members would be literally incapable of fulfilling their quotas, due to either underinvestment, mismanagement or US sanctions, meant that - according to analysts - the real increase would be closer to roughly 700,000 b/d.
As well, the final communique released by the cartel had failed to mention any specific amount for the increase in output.
Instead, OPEC committed itself to strive for "overall [100%] conformity" with its quotas, which meant rectifying its then current underproduction.
As an aside, according to Baker Hughes the US oil rig count slipped by one over the week ending on 22 June to reach 862.
By 2108 BST, the Bloomberg Commodity Index was advancing 1.04% to 87.32 points and near technical support at its 19 March lows of 86.52, while the US dollar sport index was down 0.34% to 94.54.