On Tuesday, both US and UK crude oil futures’ prices are edging higher as the 14-member OPEC (Organization of Petroleum Exporting Countries) alongside their Russia-backed allies had reportedly been brewing off an option of a large output cut at its policy meet on Wednesday, adding to further strains on a slanderous global economic outlook.
As of late-afternoon Asia-Pacific trading hour, UK crude oil futures’ prices were last trading 0.8 per cent higher at $89.23 a barrel, while US WTI (West Texas Intermediate) crude oil futures’ prices edged 0.67 per cent higher to $83.68 per barrel.
Besides, the US Dollar Index (DXY) lost some grounds as recession fear murmur, fuelling up the oil prices further. The US Dollar Index measured against a basket of six major currencies on an average was last trading 0.22 per cent lower to 111.14.
Nonetheless, Tuesday’s increase in both crude oil benchmarks came forth as oil prices rose more than 4.0 per cent yesterday, as commodity markets were betting on a havoc-scale output cut from OPEC+ member states. A press agency report had quoted sources who wished to remain anonymous given the sensitive nature of the issue as saying that the OPEC+ would slash output by 1 million barrels per day at their first in-person meet since 2020 on Wednesday.
Oil prices edge up as OPEC+ mull output cut
On top of that, voluntary output cut individual nation would likely to come into effect, adding further worries over fuel prices amid a blistering upsurge in inflation indicators.
Aside from that, citing that the OPEC+ nations would commit to a higher crude oil prices ahead of a likely demand-crunch amid fears of a recession, a senior analyst at OANDA, Edward Moya wrote in a client note earlier in the day, “Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here”.
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