Crude oil price has dropped as the new month begins with tight global supply. The scheduled November 4 meeting consisting of top crude oil suppliers has led to an increase in cash inflow for investors as speculation persists that production target of crude producers will grow.
The Brent and west Texas intermediate futures has dropped $83.26 and $82.93, representing a 0.60% and 0.8% decrease respectively. The oil price dip occurred as a result of an increase in market supply instigated by China, who stated that they have delivered two fuels reserve to bring about price stability in certain regions.
Chief analyst of Sunward trading stated that “Behind the selling was China’s release of fuels reserves, which reflected Beijing’s intention to stabilize oil prices, just like coal prices,”
Attention has been drawn towards the OPEC+ meeting, which consists of OPEC member states alongside Russia and its allies, Various market researchers predict that the cartel will maintain its strategy to increase production capabilities by adding 400,000 barrels per day in December 2021. While oil prices reached its highest figures in years, U.S. commodity futures stated that money managers cut their net long U.S. crude futures.
The U.S. president Joe Biden has prompted crucial Group of twenty (G20) oil producing companies to boost production which will in turn result in a worldwide recovery in various economies, which will be a larger plan to coerce OPEC+ to increase supply.
However, an oil marketing company in Iraq explained that Iraq is not in any form of pressure to increase production above the currency supply cap stipulated by OPEC. On the other hand Kuwait has supported the increase of global oil supply agreed by OPEC+ according to the nation’s minister of oil.
A poll conducted shows that oil prices will hold near $80 towards year ends, Due to tight supply and higher gas bill, encouraging a demand switch to crude as fuel to generate power. U.S. energy firms added new oil and gas for over 14 months running, Exxon and Chevron are planning to add more rig in the Permian hale basin.