Oil determines with price, focus on OPEC
2022.12.01 10:06
Oil determines with price, focus on OPEC
Budrigannews.com – “On the eve of the OPEC meeting over the weekend to determine future production levels, optimism about the easing of China’s restrictions on movement led to an increase in oil on Thursday.” At 09:05 eastern time, 14:05 GMT, futures rose by $82.70 per barrel, and the contract increased by 2.2 to $86.86.
In China, the number of people infected with coronavirus remains close to a record level, but some urban communities have actively begun to lift quarantine, fueling idealism that simplifying isolation conditions in general and reducing mass tests is not far away.
This happened as a result of a series of violent protests last weekend due to strict restrictions on movement, periodically introduced in the last three years, which seriously complicated economic activity, as well as the demand for petroleum products.
The Fed Chairman’s comments hinted at a slowdown in rate hikes at the December meeting, which also helped risky assets, such as oil. This means that the dollar will fall, which will make it cheaper to sell oil to holders of other currencies and ease the pressure on the American economy, the largest consumer of oil in the world.
Official information indicating that the United States lost a significant 12.5 million barrels (this is the largest weekly decline since July 2019) also helped lower oil and crude prices. This sharp decline indicates that the United States is now reducing spending on the Strategic Oil Reserve, which indicates, perhaps, limited oil supplies to the largest economy in the world.
This weekend, the Organization of Petroleum Exporters, as well as its allies, or OPEC, will meet to discuss the level of production in the coming years. Prices today are lower than in October, when the company agreed to reduce its production figures by 2 million barrels per day from the beginning of November by 2 million barrels per day.
On the eve of the OPEC conference, the noise continues to grow in the oil market. It is not yet clear what the grouping is going to do, if at all. ING analysts believe that “it is impossible to rule out further supply cuts” due to market weakness in recent weeks.
