Crude oil closes higher after OPEC decided to “stabilize the market”

Crude oil futures closed higher for the fourth straight day Thursday (Oct. 6) after OPEC and OPEC+ agreed to a production cut, the largest in two years.

  • WTI crude futures were up 69 cents, or 0.8%, at $88.45 a barrel.
  • BRENT crude futures were up $1.05, or 1.1%, at $94.42 a barrel.

Last Wednesday, OPEC decided to cut production by 2 million barrels per day for November. This was the largest production cut since 2020 and the second consecutive month of production cuts.

A spokesman for Russia’s presidential palace said OPEC+’s decision to cut production by 2 million barrels per day was to stabilize the market. And it reaffirms the credibility of OPEC+ as an organization responsible for stabilizing the market.

Goldman Sachs has raised its forecast for oil prices this year and next following OPEC’s decision to cut production.

The average price of Brent crude oil is expected to reach $104 per barrel this year, up from the previous forecast of $99 per barrel, and $110 per barrel next year, up from $108 per barrel.

Goldman Sachs also forecasts that the price of Brent crude oil will rise to $110 a barrel in the fourth quarter from $100 a barrel previously, and to $115 a barrel in the first quarter of ’23 from $105 a barrel previously.

The market was also supported by a decline in U.S. oil inventories. According to the U.S. Energy Information Administration (EIA), crude oil inventories fell by 1.4 million barrels in the week ended Sept. 30, while gasoline inventories fell by 4.7 million barrels and refined oil inventories fell by 4.7 million barrels. This included heating oil and diesel, which fell by 3.4 million barrels.

The Spot Market is Open

Friday, October 7, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
09.25

88.47

+0.02

+0.02%

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