Oil prices saw a slight rise on Monday following reports suggesting that key oil-producing nations might intensify their current supply cuts.
The Organization of the Petroleum Exporting Countries (OPEC) is set to discuss additional cuts beyond the existing daily reductions in their upcoming meeting on Sunday, November 26, as per information from Reuters sources.
The news about the possible tightening of supply led to an increase in the prices of Brent Crude and West Texas Intermediate on Monday. These prices had been on a downward trend since their peak in September.
Oil prices climbed above $81 per barrel, with traders anticipating the next move of the OPEC cartel and its allies regarding potential measures to support prices.
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West Texas Intermediate saw a 2% increase to $77.15, while Brent rose by 1.6% to $81.63 per barrel.
Sources indicated that the additional cuts could be around 1 million barrels a day, which would significantly exceed the current global reduction of approximately 5 million barrels per day.
The ongoing conflict in Israel and market volatility were mentioned as reasons for these additional cuts. However, sources suggested that the primary goal might be to proactively stabilize prices in anticipation of a potential decrease in demand next year.
Analysts are uncertain about the impact of these further cuts. Swissquote Bank noted, “It’s a risky move and could go both ways.”
The bank added, “Oil prices are declining today due to a weakening global outlook. It remains uncertain whether this move will attract buyers or worsen the existing global economic worries.”
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