- OPEC+ will cut oil production by 2 million barrels per day amid looming demand concerns.
- The output cuts are expected to keep a floor on the price of oil.
‘We’re going to see $65 before we see $100 ‘ in WTI, reports Yahoo.
OPEC+ has decided to cut oil production by 2 million barrels per day due to the imminent demand problems while also looking at the ongoing tension between the West and Russia over the war in Ukraine.
The output cut will be the largest since the start of the pandemic and seems to be about the global oil picture as well as politics.
The OPEC+ meeting was the first in-person encounter since the start of the pandemic, with Russian energy minister Pavel Sorokin present.
The output cuts are anticipated to keep a floor on the price of oil and take into account demand interests over the on-and-off Chinese lockdowns and recession fears.
Last week, West Texas Intermediate crude (CL=F) was trading more than 1% higher. Brent crude (BZ=F) was more than 1% higher.
“When you look at where crude oil is going, I still think it’s going to be weak. When you look at demand, given the potential recessionary picture globally, demand is going to fall off a cliff.
“This does seem like a crack in the relationship between the U.S. and Saudi Arabia,” he added. “That’s very discouraging in terms of what can happen with the inflation picture in terms of the midterms,” said Bob Iaccino, chief market strategist at Path Trading Partners.
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