Oil prices have fallen for four consecutive months since June, as lockdowns in top energy consumer China have hurt demand, while rising interest rates and a stronger US dollar have weighed on demand. world financial markets.
To support prices the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, are considering a production cut of more than 1 million bpd before Wednesday’s meeting, OPEC+ sources told Reuters.
If agreed, it will be the group’s second consecutive monthly cut after cutting output by 100,000 bpd last month. “The backdrop to this week’s meeting is precarious, but oil fundamentals are relatively healthy,” said Peter McNally, global head of energy at investment research firm Third Bridge.
“The two biggest question marks are the outlook for demand (especially in China) and what happens to Russian supplies after the EU ban comes into force on December 5.”
OPEC+ missed its production targets by nearly 3 million bpd in July, according to two sources at the producer group, as sanctions imposed on some members and underinvestment by others hampered its ability to ramp up output. The dollar index fell for the fourth day in a row on Monday, after hitting its highest in two decades. A cheaper dollar could bolster oil demand and support prices.
Source: Ambito
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