Brent’s close was the highest since August 30 and WTI’s since August 29. The jump in prices pushed both benchmarks into technically overbought territory for the first time since August for Brent and since June for WTI.
Both contracts closed this week with their biggest weekly percentage gains since March, with Brent up nearly 11% and WTI up 17%.
OPEC + decided last Wednesday a cut in its crude oil pumping of 2 million barrels per day from the first month of November, a higher figure cut since 2020, at which time demand plummeted at the start of the Coronavirus pandemic.
According to Saudi Arabian Energy Minister Abdulaziz bin Salman, the reduction in practice is estimated to be between 1 million and 1.1 millionas some of the cartel members are producing above their quotas.
OPEC+ justified the decision in the “uncertainty surrounding the world oil market and economic outlook,” as well as the prospect of lower demand from importing countries.
Some analysts say that demand from China, the world’s largest consumer of crude oil, would recover by the end of the year, which would put this decision in check. In addition to this, the supply of crude could suffer further cuts in the coming months when a European ban on most Russian imports comes into force in December.
The OPEC+ measure generated particular discontent in the White House. Gasoline in the United States, after reaching historical peaks in its value, fell by more than US$1 per gallon (3.8 liters) since mid-June, which brought relief to inflation in the country. However, the price of the gallon has already increased 19 cents since last September 19.
Source: Ambito
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