4 Nov 2021
Investors Focus on OPEC+ Meeting Ahead; Oil Extends Losses
The Index Today
Upcoming OPEC+ meeting on Thursday to decide production output has led to oil prices falling for three consecutive days. Futures fell close to $80 a barrel and lost almost 4%.
The OPEC meeting to decide output policy is expected to remain at previously planned production numbers for the month of December despite many nations asking for a production boost to stabilize oil prices. According to the Energy Information Administration, oil inventories went up for multiple times in the past six weeks.
The United States and Iran are expected to conduct talks regarding nuclear programs and imposing limits. This could mean more oil production in the near future from OPEC. President Joe Biden has also asked other oil-consuming nations to boost output and relieve prices and avoid an energy crunch.
OPEC+ meeting could bring changes to the current increased production of 400,000 barrels a day. Some nations such as a Nigeria and Angola have struggled to increase oil output to meet the targets set. Will Sungchill Yun, senior commodities analyst at VI Investment said, “Prices are likely to remain choppy as speculation gains on OPEC+’s next move. If OPEC decides to push forward with a 400,000 barrels a day increase as per initial expectations, then prices will be boosted once again.” According to the EIA, U.S crude stockpiles increased by 3.19 million barrels last week and inventories fell by 26.4 million barrels.