WTI rises as OPEC+'s November decision to raise output by 137,000 barrels per day falls short of expectations.
The growing likelihood that the US Federal Reserve would lower interest rates supports oil prices.
Fed Governor Miran reiterated his belief that there is still a lot of space for the central bank to reduce interest rates in the direction of neutrality.
The price of West Texas Intermediate (WTI) oil is continuing to rise, hovering around $61.60 per barrel in the early hours of Monday in Europe. Concerns about an increase in supply were allayed when the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, announced a lower-than-expected output raise, which helped to stabilize crude oil prices.
On Sunday, the group agreed to raise production by 137,000 barrels per day (bpd) in November, which would mirror the little increase in October but fall short of initial projections. Russia may have pushed for a 137,000 bpd increase prior to the meeting in order to prevent price pressure, while Saudi Arabia wanted to double, triple, or even quadruple that amount in order to hasten the recovery of its market share, according to Reuters.
The recent decision, according to OPEC+, is a reaction to a stable global economic outlook and present sound market fundamentals. It also stated that output changes could be halted or reversed if circumstances change. One year ahead of plan, OPEC+ has already reversed a 2.2 million barrel per day production cut and was working to unwind another 1.65 million barrel per day decrease by the end of September.
The expectation that the US Federal Reserve (Fed) may lower interest rates in the next sessions is another factor supporting oil prices. Reduced borrowing costs would contribute to a rise in US economic activity and oil demand.
According to the CME FedWatch Tool, markets are currently pricing in an 84% chance of another rate drop in December and a 95% chance of one in October. The Fed has much more leeway to cut its way to neutral interest rates, according to Fed Governor Stephen Miran, who reiterated his view. "I expect we will get the requisite data by the October FOMC meeting," Miran added. "This year, the policy has become considerably more restrictive."
The growing likelihood that the US Federal Reserve would lower interest rates supports oil prices.
Fed Governor Miran reiterated his belief that there is still a lot of space for the central bank to reduce interest rates in the direction of neutrality.
The price of West Texas Intermediate (WTI) oil is continuing to rise, hovering around $61.60 per barrel in the early hours of Monday in Europe. Concerns about an increase in supply were allayed when the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, announced a lower-than-expected output raise, which helped to stabilize crude oil prices.
On Sunday, the group agreed to raise production by 137,000 barrels per day (bpd) in November, which would mirror the little increase in October but fall short of initial projections. Russia may have pushed for a 137,000 bpd increase prior to the meeting in order to prevent price pressure, while Saudi Arabia wanted to double, triple, or even quadruple that amount in order to hasten the recovery of its market share, according to Reuters.
The recent decision, according to OPEC+, is a reaction to a stable global economic outlook and present sound market fundamentals. It also stated that output changes could be halted or reversed if circumstances change. One year ahead of plan, OPEC+ has already reversed a 2.2 million barrel per day production cut and was working to unwind another 1.65 million barrel per day decrease by the end of September.
The expectation that the US Federal Reserve (Fed) may lower interest rates in the next sessions is another factor supporting oil prices. Reduced borrowing costs would contribute to a rise in US economic activity and oil demand.
According to the CME FedWatch Tool, markets are currently pricing in an 84% chance of another rate drop in December and a 95% chance of one in October. The Fed has much more leeway to cut its way to neutral interest rates, according to Fed Governor Stephen Miran, who reiterated his view. "I expect we will get the requisite data by the October FOMC meeting," Miran added. "This year, the policy has become considerably more restrictive."
