Oil prices rise slightly after sales
2022.11.22 14:57
Oil prices rise slightly after sales
Budrigannews.com – Traders reacted to hints that producer alliance OPEC+ could announce another production cut at its December meeting to deepen the 2-million-barrel reduction implemented this month, causing oil prices to rise by about 1% on Tuesday, their biggest increase in two weeks.
Oil sentiment was also lifted by expectations that U.S. crude inventories would have decreased for the second week in a row last week.Even so, London-traded Brent crude was well below this month’s peak of almost $100 a barrel, and New York-traded West Texas Intermediate was well below November’s high of $93 a barrel. Meanwhile, the Covid rampage in China continued to dominate headlines, raising concerns that Beijing’s capital might be headed for a full lockdown next.
For delivery in January reached $80.95 per barrel, an increase of 91 cents, or 1.1%.On Monday, the benchmark U.S. crude price fell below $76 for the first time in 10 months.
Was trading at $88.39 at 14:35 ET (19:35 GMT), up 94 cents, or 1.1%.The previous session saw the global crude benchmark fall to a nine-month low of less than $83.
After Saudi Energy Minister Abdulaziz bin Salman, who is in charge of OPEC+, denied a report in the Wall Street Journal that the 23-nation oil producing coalition was planning a production increase instead, which would be announced on Dec. 4, crude prices appeared to have reached their lowest point as of Monday.
Additionally, Abdulaziz made a statement that had a greater impact on oil bulls:We are always prepared to intervene if further action is required to balance supply and demand by reducing production.As the alliance seeks to restore its pricing power in a market that had lost a staggering 20% of its value over the course of the previous two weeks, this was the most obvious indication in OPEC+ speak that another production cut might be coming in November.
Within a few days of OPEC+’s announcement of the November cut of 2 million barrels per day, Brent rose from a low of around $82 to nearly $100 per barrel.However, Brent dropped to $82.36 a barrel on Monday, its lowest level since February, before Abdulaziz’s remarks almost brought it back into positive territory with a settlement of $87.45.
After OPEC+ announced a production cut in November, WTI rose to around $96 per barrel.The benchmark US crude oil price fell to $75.30 on Monday, its lowest level since January, before rebounding on Abdulaziz’s comments to settle at $80.04 for the day.
According to Ed Moya, an analyst at the online trading platform OANDA, “the recent oil price slide was overdone and given global economic activity excluding China won’t completely fall off a cliff, prices should continue to stabilize here.”Moya added, however, that bulls and bears in the oil market were engaged in “a tug-of-war, with China Covid demand concerns getting countered with what appears to be a motivated Saudi Arabia to keep the oil market tight.”
Coronavirus control limitations presently burden a fifth of China’s economy as diseases proceed with their vertical walk, opposing the focal government’s call for more designated, less problematic Coronavirus Zero measures, Bloomberg detailed Tuesday.It reported 27,307 new infections on Monday alone, just shy of the previous record of 28,973 infections set in April when the outbreak in Shanghai sparked an increase in infections.
In a different report, NBC stated, “Moving away from zero-Covid is easier said than done” for China.After the Chinese capital saw the country’s first coronavirus deaths in six months and infections continued to rise, other reports stated that Beijing will face its most severe Covid test yet. Experts warn that a complete lockdown in Beijing could be disastrous for the Chinese economy.
Market participants were also looking for API, or the American Petroleum Institute, weekly oil inventory data, which was due after market settlement.
A snapshot of the closing balances on U.S. crude, gasoline, and distillates for the week ending November 18 will be made available by the API around 16:30 ET (21:30 GMT).The figures are a foretaste of the official inventory data on the same that will be released on Wednesday by the U.S. Energy Information Administration.
Analysts tracked by Investing.com anticipate that the EIA will report a decrease of 1.06 million barrels for the week ending November 11, compared to a decrease of 5.4 million barrels for the week prior.
On the front, the consensus is for a decrease of 383,000 barrels from the previous week’s rise of 2.2 million.
With, a drop of 550,000 barrels is expected, compared to a gain of 1.12 million the week before.
