LONDON — Oil prices climbed to multi-year highs shortly after a group of some of the world’s most powerful oil producers opted against a big supply boost.

Analysts believe oil prices will rise towards $100 per barrel.

OPEC and non OPEC partners (collectively referred to collectively as OPEC+) said Monday they would continue to adhere to their existing pact on a gradual rise in oil supplies.

OPEC+ saidIn a statement posted online after quick ministerial talks, it said that “reconfirmed” the production adjustment program. It was referring to its earlier agreed decision to increase the monthly market supply by 400,000 barrels daily for November.

Although the decision of the group on its production policy was widely anticipated, some were hopeful that pressure from India and the U.S. to lower oil prices would have sufficed to convince them to increase supply.

International benchmark BrentCrude futures were trading at $81.74 per barrel Tuesday morning. This is an increase of more than 0.5% in the current session. U.S. West Texas IntermediateFutures closed at $77.92. This was approximately 0.4% lower.

Brent futures gained 2.5% on Monday to close at $81.26. It reached its highest settled for three years. WTI settled at $77.62 on Monday, up 2.3% from the previous session. This is its highest settlement in nearly seven years.

Oil contracts in both countries have been up by 60% over the previous year.

Tamas Varga (senior analyst, PVM Oil Associates) stated in a Tuesday research note that “the market is full confidence.” The question now is whether or not this optimism is warranted.

OPEC+, which agreed to increase output by 400,000 barrels per month from July 2022 to April 2022, was able to eliminate 5.8 million barrels of output reductions each day.

While the recovery of global oil demand following the pandemic coronavirus has been faster than most expected, global supply disruptions caused by Hurricane Irma and low investments have disrupted global supply.

Although Brent prices above $80 may feel “toppy”, Varga stated that the price is “only seen uncomfortably higher until the first cold snap arrives in the Northern Hemisphere. This creates additional demand, and triggers a new bout of buying.”

Varga indicated that, in the near term, the backdrop currently suggests there is “still room for the upside.”

The administration of U.S. President Joe Biden has called previously on OPEC, its allies to boost oil output to tackle soaring gasoline pricesThis is. This was done amid fears that inflation would hamper economic recovery following the coronavirus pandemic.

India, another large oil consumer has also urged OPEC for more supply to guarantee that prices are fair to both producers and end consumers.

Capital Economics commodities economist Kieran Clancy acknowledged the growing pressure for OPEC+ supply returns to be made more quickly. We believe that their inability to comply means the market will continue in deficit for Q4, which will mean that oil prices will stay elevated at the very least until the end of the year.

Clancy suggested that perhaps the bigger question was “Whether OPEC+ is even able to achieve these less ambitious goals.”

“OPEC failed to achieve half of the production growth it had planned in August.” [the latest available data]This was largely because of disruptions in operations in Angola, Nigeria. Oil prices may remain high next year if the output falls short of targets.

Bank of America Global Research analysts stated that it could push its $100/barrel oil price goal forward if the temperatures drop below what is expected. according to ReutersThis is a. Analysts believe this prospect could lead to a rise in demand, and a widening supply gap.

Goldman Sachs’ analysts raised the price of Brent for their Year-End Forecast to $90/barrel from $80. They cited a more rapid recovery in global demand.

In a research paper, energy analysts from Eurasia Group stated that OPEC members “see rising prices not as a problem for the moment.” Saudi Arabia is a top exporter and has cut its official selling prices to its customers. This will likely ease worries about Brent crude oil futures increasing to above USD 80/barrel.

According to Eurasia Group, demand could be impacted by China’s economic slowdown, Evergrande’s collapse and rising inflation, as well as global Covid-19 disruptions.

A repeat of a cold winter throughout the Northern Hemisphere in the short term “could lead to major energy supply shortages within many leading industrial hubs,” the authors added.

Eurasia Group expects Brent crude oil prices to be at $75 per barrel by year’s end. The price of the contract is expected to drop to $67 in next year.