Increase in oil prices ahead of OPEC+ meeting

Picture source - news.mit.edu

Oil prices saw an increase globally on Tuesday, ahead of the Wednesday OPEC+ meeting wherein a large cut is expected to be agreed to.

As per a Reuters report, the increase in prices raises a concern for the global economy as investors anticipate that the Organization of Petroleum Exporting Countries (OPEC) and its allies, i.e. OPEC+, will reduce production by more than 1 million barrels per day (BPD) at their first in-person meeting since 2020.

Brent crude oil prices were up 46 cents, or 0.5%, to $89.32 per barrel by 0629 GMT, following a more than 4% gain the previous session.

Crude oil in the United States rose 30 cents, or 0.4%, to $83.93 per barrel. The standard point gained more than 5% in the previous session, the most since May.

Edward Moya, a senior analyst with OANDA, stated, “Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here.”

Another analyst at ING reviewed that OPEC+ may disclose a massive cut (above 1 million BPD), but in reality, the cut may be much smaller because most OPEC+ participants produce far below their goal levels of production.

According to a CMC Markets analyst, “Uncertainties remain in the global markets, such as bond market turmoil, the sell-off in risk assets, and a skyrocketing U.S. dollar.”

US crude oil stocks were estimated to have increased by around 2 million barrels in the week to Sep 30.

LEAVE A REPLY

Please enter your comment!
Please enter your name here