Today's fuel prices (June 5): Rising rapidly after OPEC+ decision.

Oil prices surged after OPEC+ extended production cuts of 3.6 million barrels per day until 2024, with Saudi Arabia continuing to reduce output.

World oil prices

According to Oilprice , at 5:45 AM on June 5th (Vietnam time), Brent crude oil was trading up $2.26, or 2.97%, to $78.39 per barrel. At the same time, US WTI crude oil also rose $2.22, or 3.09%, to $73.96 per barrel.

Oil prices continued their upward trend from the last two trading sessions of last week following the OPEC+ decision on June 4th at their meeting in Vienna, Austria.

Oil prices are on a sharp upward trend following the OPEC+ decision on June 4th. (Illustration: Reuters)

Reuters reported that OPEC+ had cut production by 3.6 million barrels per day, representing 3.6% of global demand, including a 2 million barrel per day cut at the end of last year and a voluntary 1.6 million barrel per day cut at the April meeting. These cuts were in effect until the end of 2023. On June 4th, after seven hours of negotiations, OPEC+ reached a broader agreement on production policy. Under this agreement, OPEC+ extended the cuts until the end of 2024.

Analysts say the OPEC+ decision sent a clear signal that the group is prepared to support prices and try to curb speculation.

Amrita Sen, co-founder of the consulting firm Energy Aspects, said: “This is a clear signal to the market that OPEC+ is prepared to put in place and defend the price floor.”

Gary Ross, founder of Black Gold Investors, said: "Saudi Arabia has done its job of warning speculators and clearly wants oil prices to go higher."

As predicted by UBS analyst Giovanni Staunovo, oil prices rose sharply when the market reopened this morning (June 5).

In addition to extending OPEC+'s current 3.6 million barrels per day production cuts, the group also agreed to reduce its overall production targets from January 2024 by an additional 1.4 million barrels per day compared to current targets, to 40.46 million barrels per day.

However, these cuts would be impractical as the group has lowered targets for Russia, Nigeria, and Angola to reflect current production levels.

Conversely, the United Arab Emirates was allowed to increase its production target by approximately 0.2 million barrels per day to 3.22 million barrels per day.

Will oil prices be able to remain above $80 per barrel? (Illustration: Reuters)

Based on the aforementioned OPEC+ agreement, Saudi Arabia will implement deep production cuts in July to limit supply in 2024 as the group seeks to boost falling oil prices.

Saudi Arabia's Energy Ministry said the country's production would fall to 9 million barrels per day in July from around 10 million barrels per day in May, the biggest drop in years.

Speaking at a press conference, the Saudi Arabian Energy Minister emphasized: “This is Saudi Arabia’s lollipop.” “We want to chill the pie. We always want to add some suspense. We don’t want people trying to predict what we’re going to do… This market needs stability.”