Tuesday saw a rise in oil prices as top exporter Saudi Arabia indicated OPEC+ was continuing to output curbs and might take more measures to balance the market, outweighing concerns about a global recession and the rising number of COVID-19 cases in China.
Prince Abdulaziz bin Salman, the energy minister for Saudi Arabia, was cited by the state news agency SPA as refuting a Wall Street Journal article that said OPEC was considering increasing supply. This caused prices to drop by more than 5%. By 09:15 GMT, Brent crude had risen 37 cents, or 0.4%, to $87.82. At $80.50, West Texas Intermediate (WTI) crude for the United States was up 46 cents or 0.6%.
What Do Experts Predict?
Crude oil prices are attempting to recoup their losses, according to Naeem Aslam, an analyst with Avatrade. Saudi Arabia’s denial that OPEC and its partners ever discussed increasing oil production buoyed the market today.
While Kuwait said there were no discussions about increasing output, the United Arab Emirates, another significant OPEC member, denied that it was in talks to modify the most recent OPEC+ agreement. A day before the initiation of European and G7 actions in retaliation for Russia’s invasion of Ukraine, which might strengthen the market, OPEC, Russia, and other allies meet on December 4.
According to Stephen Innes, managing partner of SPI Asset Management, “the main risk to a price cap strategy is the potential for Russian retaliation, which would transform this into an extra positive shock for the oil market.”
Worries about oil consumption constrained the upside in the wake of interest rate increases by the US Federal Reserve and China’s tough COVID lockdown regulations. On Tuesday, parks, malls, and museums did not operate in Beijing, and widespread COVID testing resumed in further Chinese cities. However, the Chinese capital issued a warning on Monday, stating that the epidemic poses its greatest threat yet, and tightened entry requirements.