The Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, could impose further cuts in oil production on Sunday. These countries are evaluating the effects of the expected ban on oil exports from Russia and the introduction of a possible price cap on Russian oil, CNBC reported.
China’s oil demand is weakening
OPEC+ is a group of 23 oil producing countries led by Saudi Arabia and Russia. The group will meet on Sunday to decide on further production policies. The meeting precedes the introduction of sanctions on Russian oil, which could have a major impact on the market. In addition, demand for oil in China is weakening and fears of a recession are growing.
The OPEC+ group agreed in early October to cut production by two million barrels a day starting in November. It did so despite calls from the United States to produce more, helping to lower fuel prices and boost the world economy. Bloomberg reported that OPEC cut production by a million barrels according to its poll, but Russia had ramped up production before the sanctions took effect.
The American business newspaper The Wall Street Journal (WSJ) recently wrote that the group could increase production by 500,000 barrels per day. OPEC+, however, has indicated that it may instead propose deeper production cuts to support oil prices.
The ban on the import of Russian oil is approaching, the Italians have taken over the Lukoil refinery
The Italian government will take control of the country’s largest refinery, which currently belongs to the Russian group Lukoil. He wants to prevent production halts after a ban on imports of Russian oil into the European Union began on Monday, ANSA news agency wrote.
RBC Capital Markets analyst Helima Croft says output is not expected to increase after the OPEC+ meeting and there is a strong likelihood of deeper cuts. According to her, there is a lot of uncertainty in the market and delegates need to take into account what will happen with China and with oil production in Russia.
A reduction in production is expected
The price of Brent oil settled below 88 dollars (2053 crowns) per barrel, at the beginning of June it was still above 120 dollars (2799 crowns) per barrel. US WTI light oil traded below $81 (1889 kroner) a barrel, while it was even above $120 six months ago.
Other analysts also expect a reduction in production. They agree that the reason will be falling demand in China and lower oil prices in the market. According to them, the final decision will also depend on what kind of change the imposition of sanctions on Russian oil could bring to the market.
The Americans will once again extract oil in Venezuela
The Chevron mining company is returning to its oil fields in Venezuela with a new license. For now, for six months, and perhaps even less, if negotiations between the Venezuelan government and the opposition to call free elections fail.
From December 5, the ban on the import of Russian oil into the European Union by sea will come into force. The G7 group of developed countries is therefore considering fixing the maximum amount that should be paid for Russian oil. No formal deal on a price cap has yet been finalized, but Reuters reported on Thursday that EU governments had tentatively agreed on a price cap of $60 a barrel. The Kremlin has previously warned that an attempt to impose a price ceiling on Russian oil would do more harm than good.
A struggle with a diesel shortage threatens. The consequences will be enormous, warns Bloomberg
No fuel in the world is as important to the world economy as diesel. Drive trucks and cars, buses, ships and trains, but also machines in construction, manufacturing and agriculture. It is also used in home heating, and due to the high price of natural gas, it is used in some places to generate electricity. But in the coming months, almost every region of the planet will face a shortage of diesel, at a time when the supply crisis in almost all the world’s energy markets has exacerbated inflation and curbed economic growth. The consequences can be enormous, Bloomberg warned.
All about inflation
Scarecrow of inflation. What causes it? How to defend yourself from her? How to invest, where to save, where are there decent interest rates, what bonds are worth it? How does the state, the government and the CNB fight inflation? Who and why increases the price and how much? How to deal with price increases? Is it the right time to get a mortgage, will interest rates go up or down and why? Context, hints, tips, warnings.
High inflation worries not only Czechia, but also other European countries and the United States. See the overview in the world.
