Categories: Market Overview

OPEC + ramping up Oil production, the US may follow

OPEC + over the weekend agreed to extend the period of the lowest quotas for another month. This news pushed Oil price by 3.5% on Monday to $43.30 for Brent, and above $40 for WTI, the highest since March 6.

However, during the day, optimism of buyers faded somewhat, as incoming news noted increased competition between manufacturers.

Firstly, Mexico refused to participate in further cuts. Recall that in April it acted as a renegade, pretty patting the nerves of the whole market.

Secondly, the Gulf states refused to extend voluntary 1.180 Mbpd restrictions.

Thirdly, Bank of America has estimated that at current prices, oil companies make a profit. Also, the International Energy Agency believes that US shale production could soon begin recovery.

It must be said that so far, the weekly data on the number of operating rigs in the USA have noted a further decline. On Friday, Baker Hughes reported a drop of working oil rigs to 206, more and more approaching the 2009 lows (176). The total number (oil + gas) has been rewriting historical lows every week for a month and a half, reaching 284.

Although prices have been increasing for the seventh week in a row, the American oil industry is just waiting for the moment to increase production. A new round of price reductions from current levels can again plunge manufacturers’ balances below the waterline.

The FxPro Analyst Team

The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

Share
Published by
The FxPro Analyst Team
Tags: brentwti

Recent Posts

EURCHF Wave Analysis 20 December 2024

- EURCHF falling inside minor impulse wave 5 - Likely to fall to support level…

2 days ago

USDCHF Wave Analysis 20 December 2024

- USDCHF reversed from resistance zone - Likely to fall to support level 0.8860 USDCHF…

2 days ago

The US dollar ends the year on a strong note

The US dollar is at two-year highs. Factors such as changes in the Fed's monetary…

3 days ago

How deep will crypto dive?

The crypto market is experiencing a decline, with a potential further drop in value. Bitcoin…

3 days ago

EURGBP Wave Analysis 19 December 2024

- EURGBP reversed from support zone - Likely to rise to resistance level 0.8300 EURGBP…

3 days ago

EURJPY Wave Analysis 19 December 2024

- EURJPY broke resistance zone - Likely to rise to resistance level 165.00 EURJPY currency…

3 days ago

This website uses cookies