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OPEC, after a day of wild swings at Omicron, oil ends higher

The market sold out dramatically after OPEC and its ally OPEC + expressed a bit of surprise by sticking to plans to increase production by 400,000 barrels per day.

After a seesaw session where benchmarks fluctuated in the $ 5 range after OPEC + stuck to plans to slowly increase production and surprised the market, oil prices settled higher than 1% on Thursday. ..

Brent crude oil futures rose 80 cents (1.2%) at $ 69.67 a barrel after hitting a low of $ 65.72 on the day, while West Texas Intermediate (WTI) crude oil futures were at least $ 62.43.

The market sold out dramatically after OPEC and its ally OPEC + expressed a bit of surprise by sticking to plans to increase production by 400,000 barrels per day.

This is the latest in a series of events, with crude oil plummeting and losing 24% in the last three weeks.

Oil futures rebuilt the rally by the end of the day, but with a combination of uncertainty over Omicron variants, government efforts to stop the flow of new infections, and expectations for more supplies. , The trader fainted.

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Brent crude oil futures rose 80 cents (1.2%) at $ 69.67 a barrel after hitting a low of $ 65.72 that day.

Rebecca Babin, Senior Energy Trader at CIBC Private Wealth US, said: “It’s like a python eating a pony.”

Commodity trading advisors, institutional investors and hedge funds are selling as well, closing positions after an overall strong year of crude oil futures.

OPEC + decided on Thursday to increase its January supply as it did the previous month. Since August, the record cuts agreed in 2020 have gradually diminished.

“I think OPEC’s decision signals conviction that they believe the recent price behavior is overkill,” said Phil Flynn, senior analyst at Price Futures Group.

The White House said it welcomed the decision, but added that the United States has no plans to reconsider its decision to release oil reserves.

OPEC + has added 400,000 barrels / day to its target, but it is well below that on a monthly basis due to the lack of investment by some members in the oil industry.

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OPEC + decided on Thursday to increase its January supply as it did the previous month.

Additional supplies come as the market addresses the lack of clarity about the severity of the omicron variant of the coronavirus and whether the vaccine remains effective against it.

U.S. President Joe Biden said his administration’s plans to fight COVID-19 did not include a shutdown, but experts added that they believe that cases of coronavirus will continue to increase in the winter. ..

US Treasury Secretary Janet Yellen warned that this variant could slow global economic growth.

Meanwhile, the European Union’s public health agency also said that this variant could be responsible for more than half of all COVID-19 infections that occur in Europe within a few months.

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Still, JP Morgan Global Equity Research said it remains bullish on oil prices and is expected to exceed $ 125 a barrel next year and $ 150 in 2023 due to OPEC + production capacity shortages.

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OPEC, after a day of wild swings at Omicron, oil ends higher

Source link OPEC, after a day of wild swings at Omicron, oil ends higher

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