Oil Prices Surge as OPEC+ Production Cuts Expected
Crude oil futures saw a significant increase of almost 3% on Monday, with the West Texas Crude Oil Contract (WTI) breaking through the $78 level. This surge was driven by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and allied nations, known as OPEC Plus, will implement production cuts to boost market prices.
Market Data
At 12:36 Thai time, the WTI crude oil contract for December delivery, traded on the NYMEX market, added $2.19 or 2.89% to reach $78.08 per barrel. This comes after four consecutive weeks of declining oil prices, primarily due to concerns about market demand. Despite ongoing geopolitical tensions, particularly the conflict between Israel and Hamas, investors remain optimistic about containing any potential escalation outside the region.
Market Analysis
Since September, oil prices have experienced a nearly 20% decline, leading to a contango situation in the market. This indicates an imbalance between supply and demand, as the price of oil in the forward delivery market surpasses that of the spot market, signifying an excess of available oil in the market.
Upcoming OPEC+ Meeting
According to an OPEC source, the upcoming OPEC+ meeting scheduled for November 26 will address the possibility of further production cuts. This follows the previous agreement to reduce production by a total of 3.66 million barrels per day until the end of 2024.
Market Outlook
Investors are closely monitoring the release of American Petroleum Institute (API) crude oil stock data on Tuesday, ahead of the US Energy Information Administration (EIA) data release on Wednesday. These reports will provide crucial insights into the future trajectory of oil prices and market stability.
WTI crude futures rose almost 3%, breaking through the $78 level, supported by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and the Allied nations or OPEC Plus will reduce oil production capacity to stimulate market prices.
At 12:36 Thai time, the West Texas Crude Oil Contract (WTI) will be delivered in December. which was traded on the NYMEX market, added $2.19 or 2.89% to $78.08/barrel.
The price of oil has fallen for 4 weeks in a row. amid concerns about market demand Meanwhile, investors think the war between Israel and Hamas will not spread outside the region.
Furthermore, oil prices have fallen by almost 20% since September. As a result, the market enters a contango situation where the price of oil in the forward delivery market rises above the price in the spot market. and indicates a large amount of oil in the market.
An OPEC source revealed that the OPEC+ meeting on November 26 will consider further production cuts. After OPEC+ previously agreed to cut production by a total of 3.66 million barrels per day until the end of 2024.
Investors will be keeping an eye on the American Petroleum Institute (API) crude oil stock release tomorrow. This is before the US Energy Information Administration (EIA) releases the data on Wednesday.
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