Breaking News
Investing Pro 0
Free Webinar - What Is a Gold IRA? Fees, Advantages, and Risks - December 7, 2022 | 01:00PM EST Enroll Now

Oil up nearly 3% as OPEC+ agrees to small oil output cut

Commodities Sep 05, 2022 01:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS/Todd Korol/File Photo
 
LCO
-1.60%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-1.91%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NG
+1.52%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GAZP
-0.41%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Arathy Somasekhar

HOUSTON (Reuters) - Oil prices rose about 3% on Monday, as OPEC+ members agreed to a small production cut of 100,000 barrels per day to bolster prices.

Brent crude futures for November delivery settled $2.72 higher at $95.74 a barrel, a 2.92% gain.

Prices had climbed nearly $4 earlier in the session, but were tamed by comments from the White House that U.S. President Joe Biden was committed to taking all steps necessary to shore up energy supplies and lower prices.

U.S. crude rose $2 to $88.85 per barrel, a 2.3% rise after a 0.3% gain in the previous session, in thin volumes during the U.S. Labor Day holiday.

The 100,000 barrels per day (bpd) reduction by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, amounts to only 0.1% of global demand. The group also agreed they could meet any time to adjust production before the next scheduled meeting on Oct. 5.

"It's the symbolic message the group wants to send to the markets more so than anything," said Oanda analyst Craig Erlam, adding that the 100,000 bpd raise last month by OPEC+ was not seen as a big deal.

"What we've probably seen from the markets was pricing in most of the worst-case scenario," Erlam added.

Top OPEC producer Saudi Arabia last month flagged the possibility of output cuts to address what it sees as exaggerated oil price declines.

Russian Deputy Prime Minister Alexander Novak said that expectations of weaker global economic growth were behind a decision by Moscow and its OPEC allies to cut oil output.

Russian Energy Minister Nikolai Shulginov said the country would most likely reduce its oil production by around 2% this year, TASS news agency reported.

"The bigger picture is that OPEC+ is producing well below its output target and this looks unlikely to change given that Angola and Nigeria, in particular, appear unable to return to pre-pandemic levels of production," Caroline Bain, chief commodities economist at Capital Economics, said.

Oil prices have fallen in the past three months from multi-year highs hit in March, pressured by concerns that interest rate increases and COVID-19 curbs in parts of China could slow global economic growth and dent oil demand.

Lockdown measures in China's southern technology hub of Shenzhen eased on Monday as new infections showed signs of stabilizing though the city remains on high vigilance.

Meanwhile, talks to revive the West's 2015 nuclear deal with Iran, potentially providing a supply boost from Iranian crude's returning to the market, have hit a new snag. The White House on Friday rejected Iran's call for a deal to be linked with closure of investigations by the U.N. nuclear watchdog, a Western diplomat said.

Iran's minister of petroleum said the global energy market needs an increase in supply of oil from Iran.

Use of oil in power generation is also expected to pick up, analysts said, as Russia's state-controlled Gazprom (MCX:GAZP) on Friday said it would stop pumping gas via the Nord Stream 1 pipeline due to a fault.

The International Energy Agency last month raised its oil demand forecast for the year, partly because it expects gas-to-oil switching in some countries due to record natural gas and electricity prices.

Oil up nearly 3% as OPEC+ agrees to small oil output cut
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (14)
Alan Rice
Alan Rice Sep 05, 2022 10:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
OPEC+: "Get one cheap, get another cheaper !!" SALE is on !!
Alan Rice
Alan Rice Sep 05, 2022 1:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
20% Production Cut : Better.
Christopher Arntz
Christopher Arntz Sep 05, 2022 1:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
F. J. B. HE IS SO PATHETIC
Fahmi Yazit
Fahmi Yazit Sep 05, 2022 12:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
And yet..still the white house keeps dingdong bell with the iran's deal. Lame..lame..dont how to tame inflation.. Biden, high oil price will definitely spark the recession+inflation dumbass.
Fahmi Yazit
Fahmi Yazit Sep 05, 2022 12:53PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Those ignorance and greedy yet brainless arabians havent got enough money..bring iran into the market to tame their greediness.
Barani Krishnan
Barani Krishnan Sep 05, 2022 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A meaningless cut on paper that will translate to nothing in actual barrels, given the underproduction we're already witnessing across the board. The Saudis have spoken and the Saudis have delivered -- that's the takeaway for the market. The truth is laughingly BS.
Brad Albright
Brad Albright Sep 05, 2022 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Joe Rizzuto LOL. That message is "Don't worry about us,"
Joe Rizzuto
Joe Rizzuto Sep 05, 2022 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
only meaningless in quantity. not meaningless in the message it sends to Biden, the u.s. and Europe. and I know, you know that.
Brad Albright
Brad Albright Sep 05, 2022 10:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
0.1% of global demand. OMG!!!
Barani Krishnan
Barani Krishnan Sep 05, 2022 10:42AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Exactly, Brad! LOL
Alikhan Kaan
Alikhan Kaan Sep 05, 2022 10:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it seems this news has been priced in ..might will get down
Barani Krishnan
Barani Krishnan Sep 05, 2022 10:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We'll probably end the session up $2 or so, then try and extend this B(S) one way or another till Thursday's EIA release. If that doesn't look good enough for a pre-Labor Day draw (last Friday still early for any preliminary pumping at gas stations, unlike the Memorial Day fever) then we could come crashing back down. One caveat for the bears though: Iran. If State Department says deal looks dead, be prepared for another $3 to $5 premium on crude that could keep growing. Also China Covid watch super important. If that clears, another $3 to $5 premium easily.
Surf Photography
Surf Photography Sep 05, 2022 9:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lets go Brandon !!! Hey it can be worse imagine kH as a president.
Gary Piccone
Gary Piccone Sep 05, 2022 9:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No more Biden “visits” to the middle east
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email