© Reuters.
Investing.com – Oil prices appear to remain subject to violent fluctuations in the coming days between action and reaction from energy sector decision makers as OPEC + vs Washington confrontation is underway.
After a session dominated by violent volatility yesterday, Monday, oil appears to be experiencing more volatility, even though it has been in a bearish direction during trading today on Tuesday.
Prices now
US light crude NYMEX fell at these trading times today, Tuesday, below $ 85 levels, dropping to $ 84.56 a barrel, down 1 or the equivalent of $ 1.1.
While benchmark Brent crude, which got closer a few days ago after the OPEC + decision, is moving from $ 100 to $ 90 levels, as during these trading times on Tuesday it fell 1%, which is l ‘equivalent of $ 1.5 a barrel, down to $ 90.71.
More volatility
ANZ Research analysts said investors strengthened their buying positions in oil futures following the sharp production cut agreed by OPEC Plus earlier this month, which included a two million barrel cut in November. .
On the other hand, the US Energy Information Administration predicts in a statement an increase in the average US shale oil production from the seven largest fields of 104,000 barrels to reach 9.105 million barrels per day in November, the highest level since. March 2020.
“Shrinking stocks of oil and petroleum products coupled with looming supply risks should keep prices volatile,” analysts from ANZ Research said.
what happened?
At the end of yesterday’s session, the prices of the futures contracts on the reference Brent crude oil fell by 0.01%, to 91.62 dollars a barrel, after having surpassed the 93 dollars in the negotiation phase.
On Friday, crude oil prices closed their trades with losses of more than 3%, despite the weakness of the US dollar, in light of expectations of a decline in demand for crude, amid high inflation rates and fears of recession.
A senior official from China’s National Energy Administration said the country has also pledged to significantly increase domestic energy supply capacity and increase risk controls in commodities; Including coal, oil, gas and electricity.
market situation
CMC Markets analyst Tina Tenn said crude oil prices found support from a combination of factors; Including comments by Chinese President Xi Jinping at the party congress that accommodative economic policies are reassured, a positive sign for the demand outlook.
China is expected to release trade and economic data this week; Although third-quarter GDP growth may rebound, President Xi’s tough coronavirus policy is limiting the recovery in demand.
interest rates
Looking ahead, oil prices are expected to remain volatile; OPEC + production cuts will cut supplies before the European Union bans Russian oil.
Conversely, a stronger US dollar and a rise in interest rates by the US Federal Reserve will limit price gains.
St. Louis Federal Reserve Chairman James Bullard said inflation has become harmful and difficult to stop, justifying increases of greater than three-quarters of a percentage point in US interest rates.
Attack on OPEC
OPEC members and their allies from abroad, including Russia, have lined up to support the sharp cut in production agreed this month after the White House escalated a war of words with Saudi Arabia.
The OPEC + alliance undertook, at its meeting on 5 October, to reduce production by two million barrels per day, which will lead to an actual decrease of about one million barrels per day; Because some members are already producing less than their goals.
though; Saudi Arabia, the largest oil exporter, will keep exports to major Asian markets stable in November.
