S&P/ASX 200 Index (ASX: XJO) energy shares might be one of few bright spots on the market today after OPEC and allies reaffirmed plans to increase production but only gradually.
What did OPEC announce?
The Organisation of the Petroleum Exporting Countries and allies, known as OPEC+ previously agreed to boost output by 400,000 barrels per day every month until at least April 2022.
However, taking into consideration the recent supply-side constraints such as Hurricane Ida disrupting oil production around the Gulf of Mexico. In addition to rising demand amidst an energy crisis in China and gas shortage in Europe, there was arguably a lot of commercial and political pressure for OPEC to bump up production and ease a tightening market.
OPEC's press release revealed that the group reconfirmed its plan to only gradually add oil to the market.
As a result, West Texas Intermediate crude surged to US$1.87 or 2.47% to US$77.59 a barrel, its highest close since 2014.
Similarly, the global benchmark, Brent Crude also rallied US$2.13 or 2.69% to a three-year high of US$81.27 a barrel.
ASX 200 energy shares on watch
ASX 200 energy shares could be a mover on Tuesday in response to the jump in oil prices overnight.
Major US-listed oil companies such as Exxon Mobil, Chevron and Royal Dutch Shell all posted slight gains overnight, rising 1.3%, 0.37% and 0.64% respectively.
This is despite all three major US indices closing at near session lows. The Nasdaq Composite plunged 311 points or 2.14%. The S&P 500 tumbled 57 points or 1.3%. And the Dow Jones Industrial Average shed 323 points or 0.94 per cent.
ASX 200 energy shares, Woodside Petroleum Limited (ASX: WPL), Santos Ltd (ASX: STO), Beach Energy Ltd (ASX: BPT) and Oil Search Ltd (ASX: OSH) could be the players to watch on Tuesday as major benefactors of high oil prices.
