Oil prices rise ahead of key OPEC meet: 5 things to know
1 min read 05 Sep 2022, 02:14 PM ISTIndia, the world's third largest importer of oil, benefits from a fall in prices as it brings down imported inflation.
PremiumGlobal oil prices were higher today ahead of OPEC+ meeting later in the day. Oil prices rose more than $2 a barrel to $95.44 a barrel, extending Friday's gains. Analysts are divided whether the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, may decide to keep current output levels or even cut production to bolster prices, despite supplies remaining tight. India, the world's third largest importer of oil, benefits from a fall in prices as it brings down imported inflation.
Here are 5 things investors should know
“There has been a lot of chatter about OPEC’s production cut. However the oil producer group is largely expected to keep productions steady today. Crude is also supported by concerns about Russian supply as G7 countries agreed to impose a price cap on Russian oil however major buyers India and China are not likely to join. Weighing on crude price are demand concerns as China’s virus related restrictions hamper economic activity. Crude may waver ahead of OPEC decision however demand concerns may keep pressure on prices," said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Oil prices have fallen in the past three months, after touching multi-year highs in March, on concerns that interest rate rises and COVID-19 curbs in parts of China, the world's top crude importer, may slow global economic growth and cool oil demand. Lockdown measures in China's southern tech hub of Shenzhen, however, eased on Monday as new infections showed signs of stabilising though the city remained on high vigilance.
Russia, the world's second-largest oil producer and a key OPEC+ member, does not support a production cut at this time, and the group will likely keep its output steady when it meets on Monday, the Wall Street Journal reported on Sunday, citing unidentified people familiar with the matter.
Commodity traders will also be eying the progress of negotiations to revive the West's 2015 nuclear deal with Iran which have dragged on though an agreement could allow Tehran to increase exports and improve global supplies.
The White House on Friday rejected linking the deal with the closure of investigations by the U.N. nuclear watchdog, a day after Iran reopened the issue, according to a Western diplomat.
