OPEC+’s attempt to raise oil prices falls through
2023-12-01
Summary:
Oil prices fell in early Asian trade on Friday, extended losses after OPEC+ agreed to voluntary oil output cuts for the first quarter next year.
Oil prices fell in early Asian trade on Friday, extended losses after OPEC+ agreed to voluntary oil output cuts for the first quarter next year.
Of the planned output cuts of 2.2 million bpd, at least 1.3 million were an extension of what Russia and Saudi Arabia already had in place. That amounts to an additional cut of 0.9 million bpd.
Oil prices settled down around 2% following the headline news. Investors had largely priced in more cuts at the meeting and voluntary reductions make the effort to support the market even less significant.
This level of reductions does very little to support the bullish case for global demand growth this year. Crude output in the US rose 1.7% in Sep to a monthly record of 13.24 million bpd, the EIA said.
China’s crude imports grew by 1.21 million bpd to 11.36 million bpd in the first 10 months of this year, while they rose 462,000 bpd to 4.62 million bpd in India.
However, the rest of Asia saw little increase in imports and more signs point to a slowdown in the US, indicating that real demand will probably lower than forecasts by OPEC and the EIA.
Brent crude has fallen back to the $80 level again. A failed attempt to break above the 200 EMA cemented the bearish structure and a deeper pullback towards 78 is on the cards.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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