Weaker Dollar Leads To Crude Oil Hike
London: 28 November 2023 (TraderMade): Oil prices saw a marginal increase on Tuesday, driven by a weakened dollar and anticipation that the OPEC+ alliance would intensify and prolong production cuts due to concerns about subdued demand.
Latest crude oil price update
At 07:19 GMT, Brent crude inched up by 1.09% (compared to yesterday's low), reaching $79.924 per barrel. Similarly, US West Texas Intermediate (WTI) crude futures rose by 1.126%, settling at $74.991 a barrel.
OPEC+ meeting for 2024 production targets
OPEC+, a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and partners like Russia, is scheduled for an online ministerial meeting on 30 November to deliberate on 2024 production targets. Since late September, Brent has witnessed an 18% decrease, while WTI has fallen by over 21%. Non-OPEC producers, particularly the United States, contributing to strong production, have further exacerbated the price pressure.
OPEC+ faced criticism last week for delaying its meeting to resolve disputes over production targets for African producers. However, recent indications suggest a potential compromise, easing concerns and aiding Saudi Arabia, the de facto leader of OPEC+, in building consensus on deepening output cuts.
Analysts believe the recent decline in oil prices might alleviate pressure on Riyadh from the United States to limit output cuts. The falling US gasoline prices for 60 consecutive days could mitigate US opposition to measures tightening oil markets and supporting prices.
Furthermore, the US dollar's retreat to its lowest level in three months is expected to stimulate demand from countries that pay for oil in alternative currencies.
