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Oil Continues Its Upward March to OPEC Drumbeat

Published 11/01/2021, 03:27 PM
Updated 11/01/2021, 05:19 PM
© Reuters.

By Barani Krishnan - Oil prices continued their upward march on Monday to the drumbeat of OPEC and its allies, who indicated they were in no mood to let the market slide by adding any more barrels than the 400,000 per day they had agreed to in the near future.

“The group is clearly perfectly happy with (existing) price levels,” Craig Erlam, analyst at online trading group OANDA, said as crude prices hovered around $85 per barrel, almost double from where they traded a year ago. “This is clearly a very bullish market.”

U.S. West Texas Intermediate crude settled up 46 cents, or 0.6%, at $84.05 per barrel.

London-traded Brent, the global benchmark for oil, finished the session at $84.71, up 33 cents or 0.4%.

Crude prices initially fell on Monday on release of strategic stockpiles by China to cool domestic energy prices.

But by the close of the session in New York, they were back higher, following the rhythm of most of the 13-member countries and allies in the Organization of the Petroleum Exporting Countries that there should be no production hike than pre-agreed levels.

OPEC+ holds its regular monthly meeting on Thursday. 

While earlier in the year, the OPEC+ meetings served to really address supply-demand issues in the market, the past few have been little more than an opportunity for the cartel to talk up crude prices by stating what traders already knew would be its response to producing countries' demands for more barrels: No.

Thursday’s meeting will likely be as "swift and consistent with the last," said Erlam, adding that he expected world leaders to again be “disappointed with the worsening oil market deficit". Energy experts say the total addition of 2 million barrels planned by OPEC between November and April is akin to a drop in the bucket for a market needing at least a million barrels more each month.

Crude prices got a boost on Monday for another reason: Bank Of America’s call that $120 a barrel might be possible by June 2022.

Latest comments

Yep! Conspire to produce less and bingo!!
just this morning you had and article saying it was which is the made up story going to be?
This is the second time you've come back with a nonsensical remark, and I hope there won't be a third. I did not with anything this morning. Got it?
It is re-assuring to see World markets at least make an attempt to do what is best for The Planet, for a change. A kudo to OPEC+ !
Its to hurt the economy of a democrat
yep just TP @ $85.30 - $85.50 this morning, reduced by $40k from last week's $180k Longs; Brent now $85.35, next TP 86.00
Ernest, all well? :)
 yes man, all good thanks! :) Although Goldman predicts price over $90, and BOA for $120 next year, I strongly doubt that. By all means I have all Longs to accommodate these target profits. Just let you know, as a friend :) Pls keep up with all these good articles/analyses :)
Unfortunately, this run isn’t going to end well….
For india they motivting us to search alternative option of fuel..
 Unfortunately, there aren't too many options. The only one involves lifting Iranian sanctions, which might be Biden's last gambit. That could bring prices down by $10 or so. The other thing, of course, would be an unusually warm winter in the northern hemisphere. The trade-off to that one would be higher than usual US gasoline consumption in the winter, coz if there's one thing the Americans love it's jumping into their cars; a warmer winter will mean a chance to do weekend road trips at a most unexpected time of the year.
 Thanks.  Any time frame on how long that rope is?
aadan yere
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