Oil prices reach lowest level in ten months in OPEC+ Production Growth Report

Oil prices fell to their lowest point since early January, Monday, after the Wall Street Journal reported that Saudi Arabia and other OPEC oil producers were discussing an increase in production.


Brent crude futures contracts for January fell $4.07, or 4.7 per cent, to $83.55 per barrel.

U.S. West Texas Intermediate (WTI) crude oil futures for December declined $4.02, or 5%, to $76.06, before the contract expired later on Monday. The largest contracting activity in January decreased by $3.82 or 4.8% to $76.29.

An increase of up to 500,000 barrels a day (bpd) will be discussed at the OPEC+ meeting on 4 December, reported the Wall Street Journal.

Reuters was unable to immediately review the report.

The Organization of Petroleum Exporting Countries (OPEC) and its allies are jointly referred to as OPEC+. The Saudi Arabian energy minister said this month that the group will remain prudent.

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Meanwhile, supply fears largely dissipated, while concerns about Chinese fuel demand and the strength of the US dollar weighed on prices.

Anticipations of further interest rate hikes have supported the Greenback, making dollar-denominated commodities more expensive for investors.

“Apart from the weakened demand outlook due to China’s COVID curbs, a rebound in the US dollar today is also a bearish factor for oil prices,” said CMC Markets analyst Tina Teng.

“Risk sentiment becomes fragile as all the recent major countries’ economic data point to a recessionary scenario, especially in the UK and eurozone,” she said, adding that hawkish comments from the US Federal Reserve last week also sparked concerns over the US economic outlook.

The number of new COVID-19 cases in China remained close to the April peaks as the country fights outbreaks at the national level.

The first-month Brent crude futures differential narrowed sharply last week, while WTI pulled back due to lower supply.

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