Crude oil futures touched $82 on Tuesday after the Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its commitment to cut output in response to lower energy prices. US and international crude futures have slumpd on demand concerns, be it global recession fears or China’s COVID-Zero strategy. Will OPEC’s moves drive up oil prices again?
December West Texas Intermediate (WTI) crude futures advanced $2.06, or 2.58%, to $81.78 a barrel at 17:10 GMT on Tuesday on the New York Mercantile Exchange. US crude has tumbled nearly 4% over the last month, but it is still up more than 8% year-to-date.
Brent, the international benchmark for oil prices, is looking to top $90. January Brent futures added $1.87, or 2.14%, to $89.32 a barrel on London’s ICE Futures exchange. Brent has also slumped in recent weeks, but the contract has climbed about 8% on the year.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman denied reports that the cartel is thinking about increasing production by 500,000 barrels per day at its meeting next month. In October, OPEC agreed to slash output by two million barrels per day.
Meanwhile, new outbreaks of the coronavirus in China have led to expectations that Beijing will reverse its plan to loosen some of its public health measures. Investors were bullish that the world’s second-largest economy could reopen and boost demand.
The Chinese economy has imported fewer goods amid an exceptional economic slowdown.
Meanwhile, the energy market has responded to increasing global recession fears that could impact oil demand.
In other energy commodities, December natural gas futures tumbled $0.084, or 1.24%, to $6.688 per million British thermal units (Btu). December gasoline futures surged $0.1108, or 4.55%, to $2.5479 per gallon. December heating oil futures were unchanged at $3.4903 a gallon.