Crude Oil Higher; Strong Tone Following OPEC+ Decision Continues By Investing.com
Investing.com — Oil prices traded higher once more Tuesday, adding to the previous session’s gains after a group of top producers decided against increasing output more than previously indicated even as demand recovers from the pandemic-induced hit.
At 9:00 ET (1300 GMT), the futures had risen 1.6% to $78.80/barrel, and futures were up 1.7% for $82.62/barrel.
WTI hit a seven year high, while Brent reached a three year peak. Both contracts saw a 2% increase on Monday.
On Monday, the Organisation of Petroleum Exporting Countries, along with their allies, including Russia, decided that it would continue to increase its production by 400,000 barrels each day until April 2022. The plan was to eliminate 5.8 millions bpd of cuts in existing production.
India and the United States, which are the third and largest energy consumers in the world, put pressure on the group to produce more to lower already high prices.
However, OPEC+ was worried that a fourth round of Covid-19 infection could impact demand recovery. Reuters reported this, citing a source. Johns Hopkins data shows that global Covid cases fell to their lowest point in almost two months Monday.
“One of the major rationales for the steady course of action for OPEC+ could be that crude oil prices have not increased as much as or coal over the recent months and demand spill from natural gas/coal to crude oil could be rather limited,” said analysts at ING, in a note.
The debate about OPEC+’s action will add more interest to the U.S. crude stockpiles data from the , due at 4:30 PM ET.
According to the industry-funded body, there was an almost 4 million barrels increase in crude oil stocks last week. This is for the week ended Sept. 24, 2012.
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