According to a report by Reuters, OPEC + is considering increasing production when it meets next week. Read how this would affect the oil price.
At a time when oil prices are near their three-year high, and consumers are pushing for more supply. this is good news for the markets. Some OPEC + sources said crude producers are considering adding more barrels than anticipated in the current deal, but none gave details on how much more or when supply would increase.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, agreed in July to increase production by 400,000 bpd each month to phase out 5.8 million bpd in cuts. It also agreed to assess the deal in December.
Another OPEC + source suggested that an increase of 800,000 bpd was possible during one month, with zero the following month. Meanwhile, the closest month to an increase in November. However, sources told Reuters on Wednesday that the most likely outcome of the next meeting would be to stick to the existing plan.
All these speculations will continue until before the virtual OPEC + meeting on October 4, with no guarantee that there will be a further increase.
All Is Not Well with Oil and Its Growing Support for Inflation
Likewise, Brent oil rose to a three-year high above $ 80 this week, driven by unplanned cuts in the United States and a strong recovery in global economic activity and energy demand as many countries emerge. of the pandemic. However, rising oil, gas, coal, and energy prices are fueling inflationary pressures around the world and slowing global recovery.
“The price of oil is a cause for concern,” White House press secretary Jen Psaki said Thursday. She said high oil prices were on national security adviser Jake Sullivan’s agenda when he met this week with Saudi Crown Prince Mohammed bin Salman.
Meanwhile, India, the world’s third-largest oil importer, and consumer said Tuesday that a rise in crude prices would accelerate the transition to alternative energy sources. read more
The energy ministers of OPEC members Iraq, Nigeria, and the United Arab Emirates said in recent weeks that the group did not see the need to take extraordinary steps to change the existing agreement.
Technical Analysis of Brent Oil
The price of Brent crude is currently at $ 78.25 per barrel, with the next bullish target being $ 79.10 and $ 79.86 in the medium term.
However, on the bearish side, if the price breaks the $ 77.57 zone, we could see it again at $ 76.81 levels. The price uptrend line remains in place, but investors should be on the lookout for the key $ 77 level that could mark a turning point in price.
In conclusion, the meeting on October 4 is key to the future of the price of this raw material. A small increase would be appropriate to minimize investors’ fears of scarce supply, and would also help to level out current global inflation figures. Remember that when something is in short supply, its price tends to be higher because it is considered more valuable.