MOSCOW, September 5 – PRIME. On Friday, oil prices rose on expectations that OPEC + will discuss the issue of cutting production at a meeting on September 5. However, the market is concerned about quarantine measures in China and the weakness of global economic growth.
The expert commented on when Russia runs out of oil
November Brent futures closed up 66 cents at $93.02 a barrel, while October WTI futures closed up 26 cents at $86.87 a barrel.
On Monday, quotes reached $94.98 per barrel Brent (+2.12%) and $88.61 per barrel WTI (+2%).
On the weekly chart, WTI futures rose above the previous week’s highs and then retreated to close below last week’s close. This is a bearish signal, said Eli Tesfey, market analyst at RJO Futures.
“If we exclude the weekly high and low, then a lower close indicates a downward reversal – this indicates that there is weakness, that the market is weak,” he explains.
The OPEC + alliance at its meeting on Monday is likely to decide to leave unchanged oil production quotas in October. This was reported to Reuters by three informed sources. However, other sources do not rule out that the cartel and its allies will cut production to support prices, which have retreated from highs hit earlier this year.
“Seven” decided: we’ll keep expensive oil for ourselves, the rest – what’s cheaper
Last week, OPEC+ revised downward its demand forecast. The alliance now expects demand in the oil market to lag supply in 2022 by 400,000 barrels a day, compared to a previous forecast of 900,000 barrels a day. The baseline OPEC+ scenario for 2023 assumes a supply deficit in the global oil market of 300,000 barrels per day.
Iran said it had sent a constructive response to US proposals to restore the 2015 nuclear deal. The US, meanwhile, was less positive. The news made some investors doubt that the deal would be reinstated, which has supported oil prices, said Phil Flynn of the Price Futures group.
“Confidence that the Iranian nuclear deal will be restored has weakened, and this has led to some covering of short positions,” Flynn added.
On Friday, the G7 finance ministers agreed to impose a ceiling on Russian oil prices, but the details of the new plan have not yet been disclosed.
In the US, non-farm payrolls rose stronger than expected in August. However, wage growth has been modest and US unemployment has risen to 3.7%, which could see the Fed raise interest rates by 75 basis points this month.
US energy companies reduced the number of operating drilling rigs last week, the fourth time in five weeks. According to data released on Friday by Baker Hughes, in the week of August 27-September 2, their number fell by 5 to 760.
Russia’s Gazprom said on Friday that natural gas supplies via the Nord Stream gas pipeline would not be resumed after an oil leak was discovered from the main gas turbine at the Portovaya compressor station near St. Petersburg.
Investors remain concerned about the impact of China’s latest anti-COVID restrictions. The city of Chengdu imposed a lockdown on Thursday, hitting manufacturers such as Volvo.
The data showed that manufacturing activity in China contracted in August for the first time in three months due to weakening demand. Production was also negatively impacted by power shortages and COVID-19 outbreaks.
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