Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Prices Mixed as Markets Digest OPEC+ Supply Cut

Published 09/05/2022, 08:05 PM
Updated 09/05/2022, 08:23 PM
© Reuters.

© Reuters.

By Ambar Warrick 

Investing.com-- British and U.S. oil futures diverged on Tuesday after the OPEC+ said it will trim production levels to offset a drop in prices amid fears of slowing demand and economic growth.

London-traded Brent Oil Futures fell 0.1% to $95.12 a barrel by 20:17 ET (00:17 GMT), while U.S. West Texas Intermediate futures jumped 2.2% to $88.75 a barrel. Both contracts surged nearly 3% on Monday. 

The Organization of Petroleum Exporting Countries and its allies led by Russia (OPEC+) said during a meeting on Monday that it will cut output by 100,000 barrels per day (bpd) for October - roughly 0.1% of global demand.

The move comes shortly after the cartel raised supply to pre-COVID levels this year. But fears of slowing economic growth across the globe have battered oil prices in recent months. 

Saudi Arabia, which leads OPEC+, had flagged a potential supply cut to offset weakness in prices. The cut was in response to speculation over a renewed nuclear deal between the U.S. and Iran, which is expected to release over 1 million bpd of supply into the market. 

Crude prices tumbled between $4 and $7 last week after weak manufacturing data from China, as well as signs of slowing economic growth in the U.S. Expectations of the Iran nuclear deal also rattled prices.

Oil prices are down substantially from 14-year highs hit earlier in the year, as concerns over slowing crude demand offset supply shocks from the Russia-Ukraine conflict.

But prices may be set for more relief, especially as gasoline demand improves in the U.S. An energy crisis in Europe, driven by a gas shortage due to Russia’s shutdown of a major pipeline, is also expected to drive up demand for heating oil in the winter months. 

London-traded London Gas Oil Futures surged nearly 3% after Russia’s move.

Latest comments

Instead of a feast bumb our old Joe got fisted. Enjoy it
It shows how clueless you are.
What is a feast bumb?
you are really brainwashed.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.