Prices rose more than 2% today as OPEC+ announced a delay in its planned production increase, while investors also focus on the upcoming US presidential elections. Futures rose $1.71 to $74.81 a barrel, and U.S. West Texas Intermediate (WTI) crude also rose $1.81 to $71.30.
The Organization of the Petroleum Exporting Countries, along with Russia and other allies, known as OPEC+, decided Sunday to extend their production cut of 2.2 million barrels per day for another month until 'in December. This decision comes after a previous postponement in October, as the group struggles with falling prices and weak demand. The consortium had initially planned to increase monthly production by 180,000 barrels per day from December.
UBS analyst Giovanni Staunovo noted that OPEC+ is seeking more certainty on the economic ramifications of recent interest rate cuts in the United States and fiscal and monetary policy adjustments in China. Staunovo also mentioned that the group is likely awaiting the outcome of the US elections and the effects of compensatory cuts from countries that have previously exceeded production limits.
The CEO of Italian energy company Eni, speaking at an industry event in Abu Dhabi, stressed that supply cuts by OPEC+ and attempts to reverse them have led to increased volatility in markets energy and had a negative impact on investment in new production.
Analysts are predicting a week of high volatility for oil prices, with particular focus on Iran's potential reaction to recent Israeli attacks and the US election results. According to Axios, Israeli intelligence services have warned of possible Iranian attacks against Israel from Iraq.
Helima Croft, head of global commodities strategy at RBC Capital Markets, said President Donald Trump's senior advisers have shown strong support for aggressive actions against Iran's nuclear sites and the reinstatement of tough sanctions. In contrast, a Harris-led administration would likely avoid escalating sanctions and seek a quick conclusion to the war.
Reuters contributed to this article.
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