Oil prices increased more than $1 a barrel on Friday, reaching close to a 14-month high, as OPEC+ decided not to hike supply in April.

Reuters reports Brent crude futures for May rose to $68 a barrel on Friday, not seen since early January last year. The contract rose $1.09, or 1.6%, to $67.83 a barrel and is on track for close to a 3% gain in the week.
In addition, U.S. West Texas Intermediate (WTI) crude futures rose 93 cents, or 1.5%, to $64.76 per barrel after reaching $64.94 earlier in the session.
Both contracts jumped over 4% on Thursday as OPEC+ prolonged oil output cuts into next month, with minor exemptions granted to Russia and Kazakhstan.
“OPEC+ has kept output steady indicating that it wants to take a cautious approach in normalising production,” according to Ravindra Rao, vice president, commodities at Kotak Securities.
“A steady rise in production can be absorbed with global demand improving and may not have much negative impact on price. Concerns will rise only if U.S. output rises in response to higher prices.”
Saudi Arabia’s decision to hold its voluntary cut of 1 million barrels per day through April surprised investors, as oil prices rallied over the last two months.
According to Citigroup commodity analysts: “An array of factors coalesced to bring the parties together, but the resultant price increase will almost certainly push the parties to change their minds when they meet again on April 1, 2021.”
The decision by OPEC+ to continue output cuts would affect consumers in oil buying nations, Indian oil minister Dharmendra Pradhan told Reuters on Friday.
“While OPEC+ clearly do see improving fundamentals for the oil market, they are still conscious of the fact that there is plenty of uncertainty around the demand outlook, and so do appear to be taking a more cautious approach,” said Warren Patterson, head of commodities strategy at ING.
“There is also an element where OPEC+ do not believe that U.S. oil production will be able to respond to the higher price environment, at least not any time soon,” he added.