Oil prices continued to fall on Monday. The reason is believed to be investor disbelief that the OPEC+ oil-producing countries’ decision to reduce oil production will actually materialize. Furthermore, demand for oil is decreasing due to the cooling of the economies of the world’s major countries.
The price of oil has already fallen by about 2% since Friday last week. This was despite the fact that the Organization of the Petroleum Exporting Countries (OPEC) and Russia had agreed to reduce oil production.
On Thursday evening around 9pm Estonian time, Brent oil traded in Europe cost $78.17 a barrel, which is 0.89% lower than at the end of the trading day on Friday.
The price of WTI-branded oil traded in the United States was $73.18 a barrel, or 1.20% lower than on Friday.
“Crude oil appears to be under continued pressure following the OPEC+ decision,” stock market analyst Vandana Hari told Reuters.
Since OPEC+ production cuts are voluntary, investors doubt whether producers will actually stick to the agreed-upon cuts. It is also unclear how the cuts will be measured.
“Last week’s OPEC+ deal was unconvincing to say the least,” said Craig Erlam, an analyst at brokerage OANDA.
“And as markets predict an even greater economic slowdown next year, this statement is not enough,” he added.
Business survey results released on Friday and Monday showed global industrial activity remained weak in November, the volume of industrial production in the euro area fell and German companies sharply reduced their investment forecasts . Furthermore, contradictory data continues to emerge on the state of the Chinese economy. All of these indicators point to the possibility that oil demand will continue to decline.
2023-12-04 19:04:00
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