Oil cut gains after OPEC + announcement

As previously announced, OPEC + will continue its cooperation and slightly increases the production target in September, namely by 100 thousand. barrels per day. Earlier, the price of crude oil was rising due to the low chances of a concrete move from OPEC +. Following the publication of this decision, we are witnessing a profit taking. It is worth noting, however, that raising the production limit will not really reduce the huge deficit. The next OPEC + meeting is scheduled for September 4.

OPEC + in a statement also points out that some countries have experienced problems with increasing production, and stresses that the lack of major investment could lead to a shortage of supply in the coming years.

Additionally, it is worth remembering that in October the United States will stop releasing strategic reserves, which will reduce the supply by about 1 million barrels per day. Moreover, greater consumption of petroleum products in Europe during the winter period can be expected due to gas shortages. Therefore, the negative factors for oil may soon end, although concerns about economic growth are certainly the biggest drag.

Source: xStation5