The OPEC+ ministerial monitoring committee meeting has ended. The OPEC-JMMC has recommended proceeding with the previously-agreed 400K barrel per day hike in November. WTI crude has surged to $77 a barrel, hitting the highest in more than 7 years. Brent has broken above $80 a barrel. The full meeting of the OPEC and its allies has started. Before the meeting, two options were being considered: to increase oil output by 400K barrels per day or 800K bpd, with a pause in December. It looks like the group favours the former and oil prices have reacted accordingly. It should be noted that both options will in effect offer no increase beyond what was previously agreed. To that end, the impact of the decision should have limited influence on oil prices. But if the OPEC+ somehow surprised us later and opt for 800K in November with a pause in December, then this would at least relief some pressure in the short-term.
In the longer-term outlook, the rising price of crude oil is only going to exacerbate inflationary pressures, specially for some emerging market economies like India. This in turn should weigh on oil demand. But for now, it looks like traders are happy to keep buying oil and will be asking questions later.
Source: ThinkMarkets and TradingView.com
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