Oil: A price increase is likely – Commerzbank
|The outcome of the US presidential election is also likely to have an impact on the oil market. However, the Trump effect on prices is rather unclear here, so that only concrete measures are likely to move prices, Commerzbank’s commodity analyst Barbara Lambrecht notes.
Withdrawal of the voluntary cuts can result in an oversupply
“In the short term, the oil price will be determined by the production plans of the eight OPEC+ countries, which had committed themselves to voluntary cuts of 2.2 million barrels per day almost a year ago. At the beginning of September, they had announced that they would start to reopen the oil tap from December onwards, month by month, by a total of around 180,000 barrels per day.”
“However, according to the Reuters news agency, sources close to OPEC have indicated that this production increase will be postponed again by at least one month. This would likely mean that the decision would be postponed until 1 December, when the oil ministers of the cartel will hold their next regular meeting to decide on next year's production strategy.”
“Although most of the production cuts are fixed until the end of 2025, a withdrawal of the voluntary cuts could result in an oversupply that would put further pressure on prices. If the postponement is announced at the beginning of next week, this should support prices. However, they are unlikely to rise significantly, as China's crude oil imports, which are due to be published on Thursday, are likely to bring demand concerns back into focus. A price increase would be likely if Iran were to attack Israel again in the coming days.”
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