Global oil benchmarks extended gains on Monday, November 20, as further supply cuts in OPEC+ production are expected in the coming weeks.
On Monday, oil futures gained over $1, continuing their upward trajectory amid expectations of tighter supply cuts by OPEC+, according to a Reuters report. The move is aimed at stabilizing prices, after four consecutive weeks of declines due to concerns about weakening demand.
Brent crude futures were up $1.31, reaching $81.92 a barrel as of 1238 GMT. US West Texas crude also gained $1.16, reaching $77.05. The December WTI contract, due to expire later on Monday, edged higher, while the more actively traded January futures added $1.27 to $77.31.
Last week on Friday, both contracts increased by 4%, according to sources as cited by Reuters. This coalition of producers, made up of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, plans to see if further cuts could be implemented during its meeting on the 26 November.
Since the end of September, oil prices have fallen by almost 20%, and last week, the month-to-month spot spreads for Brent and WTI moved into contango. In a contango market, spot prices are lower than those in future months, indicating sufficient supply.
“In light of the destruction of the oil bulls last week, there was some kind of response coming from the group of producers (OPEC). “If further cuts are agreed, a short-term price increase is expected, but its longer-term price impact appears questionable as enforcement and compliance will be a key issue,” said Tamas Varga of oil broker PVM.
Whereas, in India, according to the Multi Commodity Exchange (MCX), crude oil futures due to expire on November 20, were last trading 3.03% higher at ₹8,260 per bbl, after swinging from ₹8,018 per bbl, this morning against its previous close ₹6,252 per bbl on Friday.
The drop in oil prices last week was driven by a significant increase in US crude inventories and production that was still at historic highs. In addition, signs of weakening demand in China raised concerns.
An additional element that fueled pessimism was the increase in the number of Americans submitting new claims for unemployment benefits, together with a downturn in industrial production statistics.
Milestone Alert!Livemint tops the charts as the fastest growing news website in the world 🌏 Click here for more information.
Receive all the Merchandise News and Updates on Live Mint. Download the Mint News App to get Daily Market Updates & Live Business News.
Less
Updated: 20 November 2023, 10:57 PM IST
Denial of responsibility! greenleaselibrary.org is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at loginhelponline@gmail.com The content will be deleted within 24 hours.
