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Oil Well Past $80 as OPEC Squeezes an Already Tight Market

Commodities Oct 04, 2021 03:00PM ET
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​​By Barani Krishnan

Investing.com - Oil prices broke well beyond $80 per barrel on Monday as bulls in the market cheered OPEC+’s decision to add only incrementally to its production despite the squeeze in global supplies and worsening inflation by the day.

Prior to Monday’s meeting of the 23-nation alliance of oil producers, there had been speculation that it could agree to adding more than the 400,000 barrels per day it had committed to until the end of April. 

But after the video linkup among the 13-member Saudi-led Organization of the Petroleum Exporting Countries and a group of 10 other producers steered by Russia, the message was clear: It will be the same 400,000 bpd over the next six months, barring any change down the road.

There was no official statement on the matter. But a Saudi official told the Wall Street Journal that “the kingdom is comfortable with the current price range and feels it won’t weigh on demand for oil”. 

No OPEC delegate directly addressed the White House or India, the world’s third largest oil importer, which had been clamoring for higher supplies to reduce oil prices and ramping inflation.

The agreement came as OPEC+ appears to be in full control of an oil market that just 18 months ago seemed to be floundering all over it amid demand destruction from the Covid-19. 

From its first-ever negative pricing of $40 per barrel in April 2020, U.S. crude’s West Texas Intermediate benchmark settled Monday’s trade at $77.62 per barrel, up $1.74 on the day or 2.3%. Earlier in the session, it hit a seven-year high of $78.36. WTI has gained 60% this year alone.  

London-traded Brent crude, the global benchmark for oil, finished Monday’s session at $81.26 per barrel, up $1.98 or 2.5%.  Brent peaked at $81.98 during the session. It is up 57% for this year.

While oil prices seem to be on a different planet now compared to their depths during the pandemic, ironically some OPEC delegates said in private conversations with journalists that they were concerned about the same virus and its variants once again depressing prices.

Oil Well Past $80 as OPEC Squeezes an Already Tight Market
 

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Comments (12)
Alan Rice
Alan Rice Oct 04, 2021 8:07PM ET
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World oil glut (addressed,-- but far,far, from being at all, mitigated). Earth is dying.
Miles Mathewson
Miles Mathewson Oct 04, 2021 8:01PM ET
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well, it was 35 negative last year....now it's their time to make money...who can blame them ?
Louis Lipps
Louis Lipps Oct 04, 2021 7:36PM ET
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Under Trump oil would be 55-60 right now.  Under this guy we'll be at 150 by next summer.  To the moon!!!!
Louis Lipps
Louis Lipps Oct 04, 2021 7:34PM ET
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Go on tomtom and look at traffic in Europe and other parts of the world.  They aren't worried about new variants right now I can assure you of that.  Oil....to the moon!!!!!
Edward Adigunawan
Edward Adigunawan Oct 04, 2021 7:15PM ET
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where is that american shale production? in addition to the shutting down of that canadian pipe. oh well..consequences
Michael Rohde
Michael Rohde Oct 04, 2021 7:15PM ET
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Ask Biden
Miles Mathewson
Miles Mathewson Oct 04, 2021 7:15PM ET
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why? isn't US all about green energy right now? Why do you care if oil hits $200 ?
Aminu Ahmad
Aminu Ahmad Oct 04, 2021 7:11PM ET
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okay good night
Gamer Turtle
GamerTurtle Oct 04, 2021 7:01PM ET
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only way to end price fixing is either thru economic warfare or actual warfare. we gotta pump more so they will pump more, or we just gotta end their regime permanently someday.
Optimum integrated Services
Optimum integrated Services Oct 04, 2021 5:23PM ET
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opec are greedy people....
John Laurens
John Laurens Oct 04, 2021 5:23PM ET
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No, Biden ends American production dominance, so intelligent businessmen make cash.. This isn't complicated.
Mark Sikapizye
Mark Sikapizye Oct 04, 2021 3:36PM ET
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It could be understood that OPEC is interested in strengthening their grip on the globe as a cartel but there could be an avenue of engaging in a discussion with OPEC at an appropriate venue to try and reach a decision that also takes into consideration the effects of Covid19 on supply chains especially on poor economies.
Nasser Hefny
Nasser Hefny Oct 04, 2021 3:36PM ET
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Since when western world care about poor economies
Nasser Hefny
Nasser Hefny Oct 04, 2021 3:36PM ET
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Since when western world care about poor econmies!!! hahaha.
Robert farrington
Robert farrington Oct 04, 2021 3:36PM ET
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hello
John Laurens
John Laurens Oct 04, 2021 3:36PM ET
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America became the largest net exporter of oil under Trump, and incidentally stuck it to the Saudis. Now we have oil hating Biden cutting American production, and .. SHOCK FACE .. The Saudis return the favor.. and all the little dem piggies go wah wah wah.. I wonder if gas prices are going to be an issue in the mid-terms?
Sohel Rana
Sohel Rana Oct 04, 2021 3:32PM ET
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thanks
Robert farrington
Robert farrington Oct 04, 2021 3:32PM ET
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hello
 
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