A mixed bag
The Indian economy is currently at a critical juncture. The Centre’s recent monthly economic report paints a picture that’s both…
West Texas Intermediate futures jumped 3.2 per cent to US$82 a barrel, advancing for the first time in three sessions.
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A reduction of that magnitude would be the biggest since the Covid-19 pandemic, although the delegates said a final decision on the size of the cuts would not be made until ministers gather in Vienna on Wednesday.
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Oil plunged by a quarter in the three months to September as a slowing global economy sapped energy demand. Banks including UBS Group and JPMorgan Chase said recently that Opec+ may need to lower output by least 500,000 barrels a day to stabilise prices.
A cut of more than one million barrels a day “will be enough to put a floor under prices”, said Mr Phil Flynn, a senior market analyst at Price Futures Group.
A large output cut may draw criticism from the United States and other major consuming nations, where energy-driven inflation has forced central banks to aggressively jack up interest rates. This week’s meeting of the Organisation of Petroleum Exporting Countries and its allies will be its first in-person gathering since March 2020.
In Asia, China issued new quotas for fuel exports and crude imports last week as it sought to revive its economy, adding to bullish sentiment for oil. The world’s biggest crude importer has seen energy demand take a tumble due to virus lockdowns and a property slump this year.
“It is only going to be a matter of time before oil returns to US$100 a barrel, especially with supplies set to get tighten towards the end of the year,” said Mr Suvro Sarkar, an energy analyst at DBS Bank in Singapore. BLOOMBERG
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