Commodities: Oil prices rise on expectations that OPEC+ will discuss production cuts

Oil prices are up around three percent at the end of the week on expectations that the OPEC+ group will discuss production cuts next week. However, concerns about China’s closure of major cities in an attempt to prevent the spread of covid-19 and the fragility of the global economy are preventing greater profits.

The price of Brent North Sea oil rose 2.8 percent to $94.94 per barrel shortly before 5:15 p.m. CET. US light West Texas Intermediate (WTI) also showed an increase of 2.8 percent to slightly above 89 dollars per barrel.

Both benchmarks fell three percent to two-week lows in the previous session. Brent is on track for a weekly decline of almost seven percent and WTI around five percent.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia (OPEC+) are due to meet on September 5. They are expected to take a stand on the estimated drop in oil demand.

OPEC+ this week revised the market estimate for this year. According to him, demand lags behind supply by 400,000 barrels per day (bpd), compared to an earlier estimate of 900,000 barrels per day. In its base scenario, the group expects a market deficit of 300,000 bpd for 2023.

WTI oil price development (1-hour chart – H1):

Brent oil price development (1-hour chart – H1):


Source: Reuters, CTK, OPEC, MT4

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The article is in Czech

Tags: Commodities Oil prices rise expectations OPEC discuss production cuts

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