Investing
Oil rises as OPEC+ meeting eyed, global demand concerns weigh
Global Banking & Finance Review®
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By Alex Lawler
LONDON (Reuters) -Oil rose on Tuesday ahead of a meeting of OPEC+ producers this week that may not lead to a further boost in crude supply, although concern about a possible global recession limited gains.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, meet on Wednesday. Two of eight sources said a modest output hike would be discussed, while the rest said a boost was unlikely.
Brent crude was up 84 cents, or 0.8%, to $100.87 a barrel at 1340 GMT, while U.S. West Texas Intermediate crude added 55 cents, or 0.6%, to $94.44.
“There’s a lot more uncertainty this time around,” said Craig Erlam of brokerage OANDA of the OPEC+ meeting. “The decision this week will tell us just how unified the group still is.”
Oil soared earlier in 2022, with Brent in March coming close to its all time high of $147 a barrel after Russia’s invasion of Ukraine added to supply concerns. Worries about slowing growth have since eclipsed tight supply.
Surveys showed on Monday that factories across the United States, Europe and Asia struggled for momentum in July as flagging global demand and China’s strict COVID-19 restrictions slowed production.
“These readings did nothing to mitigate the fears of recession,” said Tamas Varga at oil broker PVM.
Casting a cloud over the market are worries that a visit to Taiwan by U.S. Speaker of the House Nancy Pelosi will escalate tensions between the United States and China. Stocks slipped and bond yields fell on worries about the visit.
Also coming into view is the latest weekly reading on U.S. inventories. Analysts expect a decline in crude and gasoline stocks. This week’s first report is due at 2030 GMT from the American Petroleum Institute. [EIA/S]
(Additional reporting by Muyu Xu Editing by Jason Neely and Mark Potter)
OPEC+ is a coalition of oil-producing countries, including OPEC members and other producers like Russia, that coordinate to manage oil production and influence prices.
Brent crude is a major trading classification of crude oil originating from the North Sea, used as a benchmark for oil prices worldwide.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing, primarily produced in the United States.
A global recession is a period of economic decline that affects multiple countries, characterized by reduced trade, investment, and consumer spending.
U.S. inventories refer to the stockpiles of crude oil and petroleum products held in storage, which are monitored to assess supply and demand dynamics.
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