Background on Key Figures and Relevance
The Organization of the Petroleum Exporting Countries Plus (OPEC+) is a grouping of oil-producing nations, including members of OPEC and other countries like Russia. This alliance plays a crucial role in determining global oil supply and, consequently, influences oil prices. The group’s decisions on production levels can significantly impact the market.
Oil Price Trends in September
In September, oil prices experienced a downward trend. On Tuesday, Brent crude fell by 1.40% (95 cents) to $67.02 per barrel, while West Texas Intermediate (WTI) dropped by 1.70% (1.08 dollars) to $62.37 per barrel, according to Reuters data.
By the end of September, WTI had decreased by 2.56%, and Brent had fallen by 1.61%. Mexico’s export mix, meanwhile, closed at $61.16 per barrel, a 1.43% drop (89 cents), following a 2.64% decline in September, as reported by Petróleos Mexicanos.
These results have led to two consecutive months of decline for the three oil markers. While the third quarter has seen mixed results – WTI down 4.21%, Brent losing 0.87%, and Mexican mix up by a mere 0.08% – the recent trend is predominantly negative.
Market Cautious Amid Supply and Demand Concerns
The market has been cautious in recent weeks, balancing supply risks—mainly stemming from Ukraine’s attacks on Russian refineries—with expectations of oversupply and weak demand.
OPEC+ Preparing for Upcoming Meeting
OPEC+ gearing up for virtual meeting
At the upcoming OPEC+ meeting, the group may accelerate its production for November, potentially increasing output by over 137,000 barrels per day from the planned rise in October. Saudi Arabia is pushing for regaining market share.
“The anticipation that producer nations will strengthen their supply commitments creates an oversupply bias, putting downward pressure on prices,” said Antonio Montiel, director of ATFX Education.
Eight OPEC+ members might increase production in November by between 274,000 and 411,000 barrels per day—more than in October, according to two of the three sources. OPEC+ accounts for roughly half of the world’s oil production.
Key Questions and Answers
- What is OPEC+? OPEC+ is an alliance of oil-producing nations, including members of the Organization of Petroleum Exporting Countries (OPEC) and other countries like Russia. This group plays a significant role in determining global oil supply and influencing oil prices.
- Why are oil prices falling in September? Oil prices have been declining due to a combination of factors, including expectations of oversupply from the OPEC+ planned production increase in November and weak demand. Additionally, supply risks stem from geopolitical tensions, such as Ukraine’s attacks on Russian refineries.
- What might OPEC+ decide at their upcoming meeting? OPEC+ may accelerate its production for November, potentially increasing output by over 137,000 barrels per day. Saudi Arabia is pushing for regaining market share amidst expectations of oversupply.
