The oil prices rise almost a 3% this Monday, November 4, after the decision of the Organization of the Petroleum Exporting Countries plus Russia and other allies (OPEC+) to delay its plans to increase production by a month, as the market prepares for a crucial week that includes the presidential elections in the United States and a key meeting in China.
American crude oil West Texas Intermediate (WTI) scale 2.04 dollars, or a 2.9%, to $71.53 per barrel, while the Brent go up 1.99 dollars, or a 2.7%, to 75.09 dollars per barrel.
Oil: OPEC+ delays production increase
On Sunday, the OPEC+ said it would extend its production cut of 2.2 million barrels per day (bpd) by another month in December, with an increase already postponed from October due to falling prices and weak demand. The group planned to increase production by 180,000 bpd starting in December.
“Given ongoing concerns about economic growth, we believe the group wants more clarity on the economic impact of interest rate cuts in the United States and the easing of fiscal and monetary policy in China,” the analyst said. from UBS Giovanni Staunovo.
“The group should also be clear about the next US president and the impact of compensation cuts from countries that produced above their ceiling in the past,” he added.
OPEC+ is set to gradually unwind the 2.2 million bpd cut in the coming months, while another 3.66 million bpd of production cuts will remain in place until the end of 2025.
The French oil company TotalEnergies considers that the Global oil demand will peak after 2030 under its two most likely energy transition scenariosnone of which will limit global warming to 2 degrees Celsius, as proposed by the Paris Climate Agreement.
Last week, Brent and WTI posted weekly declines of 4% and 3%, respectively, as record U.S. production weighed on prices.. However, both contracts rose on Friday after news that Iran could launch a retaliatory attack against Israel in the coming days.
On Thursday, the American news website Axios said that the Israeli intelligence suggested that Iran was preparing to attack Israel from Iraq within days, citing two unnamed Israeli sources.
The markets are also awaiting Tuesday’s presidential elections in the United States, in which polls show a tie between the Democratic vice president Kamala Harris and the former Republican president donald trump.
On Thursday, economists expect the Federal Reserve of the United States cuts interest rates by 25 basis points.
Source: Ambito
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