As traders evaluated reports that OPEC Plus, the group of oil-producing nations that includes Saudi Arabia and Russia, was considering a significant reduction in production at its meeting this week, oil prices rose globally on Monday.
The price of West Texas Intermediate, the U.S. benchmark, increased by more than 6 per cent to nearly $84 per barrel, while Brent crude, the international benchmark, increased by more than 5.3 per cent to more than $89 per barrel. Since their June peaks, both crude grades have lost more than a quarter of their worth. According to analysts, the Saudis were determined to push oil prices as high as $90 per barrel.
A sequence of hikes that had put downward pressure on prices together with sluggish economic growth that has resulted in reduced estimates for oil demand would be reversed by the OPEC Plus cutbacks of maybe up to one million barrels a day, or around 1% of the world supply.
The International Energy Agency also forecasted that the demand for natural gas will be lower than originally anticipated in a research that was made public on Monday. In Europe, where high prices since Russia’s invasion of Ukraine have caused consumption declines and stoked concerns about energy security, the decline would continue to be most noticeable.
Gas exports from Russia to Western Europe have been curtailed, and the apparent sabotage of the Nord Stream pipelines from Russia to Germany last week has eliminated any chance of them being turned back on anytime soon.
The S&P 500 began trading in other markets with a gain of almost 1%, kicking off the fourth quarter well. The preceding quarter came to a close with yet another loss, marking the first time since the global financial crisis that Wall Street has experienced three straight quarterly losses. Early trading saw an almost 5% increase in the index of energy companies, making it by far the sector with the highest performance.
The major South Korean and Chinese indices both lost some territory, while Japan’s Nikkei 225 gained 1% and the Stoxx 600 in Europe gained some ground.
Priscilla Fumadorh
Priscilla is an entrepreneur and a creative communicator who loves to communicate through writing. She is passionate about national economic issues and does not miss a chance to offer her opinions on them for the good of the country.