Oil rallies above US$85 as traders bet on potential opec+ cuts
BNN Bloomberg
Oil rose again following 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$85 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 the global oil market’s spare capacity is extremely low.
“If they don’t do anything, the prices will slide to $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 $90” a barrel, he said.
The OPEC+ meeting will force the group to decide whether supply is currently too generous given concerns about global oil demand, Vitol Group Chief Executive Officer Russell Hardy said at the Energy Intelligence Forum in London. The demand side of the oil market is clearly a concern at the moment.
