Global oil benchmarks pulled back from their lowest levels in nearly a year on Monday, with US crude ending positive, bolstered by talk of an OPEC+ production cut that offset concerns about strict Covid-19 curbs in China, the world’s biggest crude importer. Price action was volatile. US West Texas Intermediate (WTI) crude settled up 96 cents, or 1.3%, at $77.24, after earlier touching its lowest since December 2021 at $73.60. Brent crude also briefly turned positive, but settled down 44 cents, or 0.5%, at trade at $83.19 a barrel, having slumped more than 3% to $80.61 earlier in the session for its lowest since January 4, 2022. Both benchmarks have posted three consecutive weekly declines. “The word on the street is there’s rumour that OPEC+ is already starting to float the idea of a production cut on Sunday,” said Matt Smith, lead oil analyst at Kpler. “That’s helped reverse losses that were caused overnight by Chinese protests.” Analysts at Eurasia Group suggested in a note Monday that weakened demand out of China could spur the Organisation of the Petroleum Exporting Countries and allies including Russia to cut output after reducing supply in October.
Published in The Express Tribune, November 29th, 2022.
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