Oil forges higher as OPEC+ must 'do something' at Vienna meeting
BNN Bloomberg
Oil rose after its biggest one-day gain since May as the market looked to OPEC+ to deliver a substantial cut in supply.
West Texas Intermediate climbed above US$84 a barrel after rallying by more than 5 per cent on Monday. The Organization of Petroleum Exporting Countries and its allies including Russia will consider reducing output by more than 1 million barrels a day when they meet on Wednesday, according to delegates. On Tuesday, Saudi Aramco’s chief executive officer warned that that global oil market’s spare capacity is extremely low.
“If they don’t do anything, the prices will slide to US$80 or lower, the market is bearish,” Fereidun Fesharaki, founder and chairman of FGE, told Bloomberg Television in an interview. “They have to do something, they have no choice. They want to protect something, which is about US$90” a barrel, he said.
Oil slumped 25 per cent last quarter as central banks including the Federal Reserve raised rates aggressively to combat runaway inflation. The shift to tighter monetary policy spurred speculation of a sharp slowdown in global growth, hurting demand for commodities that were also hit by a surging dollar, though some of that strength cooled on Tuesday.
