Oil prices are trading lower this Wednesday, December 6, and accumulate their fifth consecutive loss. This happens at a time when investors weigh the effectiveness of a extension of OPEC+ cuts in the reduction of supply in the face of a deteriorating demand outlook in China.
Crude oil futures Brent falls 2.3%to US$75.43 the barrel. Crude oil futures US WTI gives up 2.6%to US$70.43 the barrel. That way, they both touch lows since July 3, 2023.
Oil on a bearish streak: in what context?
The Organization of Petroleum Exporting Countries and its allies – including Russia-, group known as OPEC+they agreed at the end of last week voluntary cuts of production of about 2.2 million barrels per day (bpd) by the first quarter of 2024.
Saudi and Russian officials added this week that cuts could widen or deepen beyond March.
“The decision to continue reducing production from January has failed to stimulate the market, and recent, apparently coordinated, assurances from Saudi Arabia and Russia to extend restrictions beyond the first quarter of 2024 or even deepen cuts if necessary have also fallen on deaf ears,” Tamas said. Varga, PVM analyst.
The concern about China’s economic healththat could limit global fuel demand in the world’s second largest consumer of oil, also weighed on prices.
The rating agency Moody’s downgrades China’s A1 rating outlook from stable to negativeciting “increased risks related to structurally and persistently lower medium-term economic growth and the continued downsizing of the real estate sector.”
China to publish preliminary trade data next Thursday, including those related to crude oil imports. Previous forecasts showed that Chinese refinery operations had declined in November.
The Russian president, Vladimir Putin travels to the United Arab Emirates and Saudi Arabia on Wednesday to meet with the Emirati president, Sheikh Mohammed Bin Zayed Al Nahyanand the Saudi crown prince, Mohammed bin Salman. According to the Kremlin, oil and the OPEC+ agreement will be on the agenda.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
