By Adedapo Adesanya
The prices of the crude oil grades rose by more than 2 per cent on Tuesday after top exporters said the Organisation of the Petroleum Exporting Countries and allies (OPEC+) was sticking with output cuts and could take further steps to balance the market.
Consequently, Brent crude gained $1.83 or 2.1 per cent to close at $89.28 per barrel, while the United States West Texas Intermediate (WTI) crude was up by $1.80 or 2.3 per cent to $81.84 per barrel.
Saudi Arabian Energy Minister, Prince Abdulaziz bin Salman, on Monday, denied a Wall Street Journal report that sent prices plunging by more than 5 per cent, saying the alliance was considering boosting output.
The United Arab Emirates, another big OPEC producer, denied it was holding talks on changing the latest OPEC+ agreement.
“We remain committed to OPEC+ aim to balance the oil market and will support any decision to achieve that goal,” its energy minister, Mr Suhail Mohamed Al Mazrouei, said in a Twitter post.
On its part, Kuwait said there were no such talks. The country’s oil minister, Mr Bader Al Mulla, on Tuesday, also denied reports that there had been discussions to increase oil production at the next OPEC+ meeting.
According to the Kuwaiti minister, the country is keen to maintain stability and balance in oil markets.
Algeria also said an “improbable” revision of the OPEC+ agreement was not discussed.
The development outweighed global recession worries and concerns about China’s rising COVID-19 case numbers.
OPEC+ will meet on December 4, a day before the start of European and G7 measures in response to Russia’s invasion of Ukraine, which could support the market.
On December 5, a European Union (EU) ban on Russian crude imports is set to start, as is a G7 plan that will allow shipping services providers to help to export Russian oil, but only at enforced low prices.
Concerns over oil demand in the face of the US Federal Reserve’s interest rate hikes and China’s strict COVID lockdown policies limited the bullishness.
In China, Beijing shut down parks, shopping malls, and museums on Tuesday, and more Chinese cities resumed mass COVID testing. The Chinese capital on Monday warned that it is facing its most severe challenge of the pandemic and tightened rules for entering the city.
Analysts are now cutting forecasts for China’s year-end oil demand. This is as China’s zero-COVID policy is predicated on the imposition of lockdowns introduced across entire cities immediately as soon as new COVID-19 cases are identified.
Modupe Gbadeyanka