Oil nears $50 for the first time since the start of the pandemic after OPEC+ agrees to a gradual output increase of just 500,000 barrels a day in January
Oilprices neared $50 for the first time since its historic crash this year after OPEC+ agreed to raise supply in January.
- Producers agreed to increase output by 500,000 barrels per day in January, far lower than the 2 million barrels expected.
- Plans on further output levels will be decided at future meetings.
- Commerzbank said it doesn't share the oil market's positive interpretation and attributes the latest price strength primarily to speculative buying.
Oil prices jumped to their highest level since the start of the pandemic after
"We do not therefore share the oil market's positive interpretation and attribute the latest price strength primarily to speculative buying," he said. Rise in output is ordinarily negative for oil prices, which is why the senior analyst believes the current price movement is "somewhat illusory."OPEC oil output rose by 750,000 barrels a day in November, according to a Reuters survey, as increased production from Libya showed differences in implementation of the agreed quota. The UAE and Angola made the compensatory cuts required to offset excessive production in the preceding months, while countries like Nigeria and Iraq failed to do so. Similarly, smaller oil producers like Congo, Guinea, and Gabon have fallen short of the agreements. "This makes further tensions within the group with respect to a higher oil price a foregone conclusion," Weinberg said.
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