Oil Declines Despite OPEC+ Limited Decision to Increase Production
Oil prices fell on Tuesday, reversing yesterday's gains, indicating continued investor concerns about a global supply glut amid weak demand, despite OPEC+'s limited decision to increase production.
Prices Decline Despite OPEC+ Decision
West Texas Intermediate (WTI) crude futures fell to $61.30 a barrel, a significant decline after yesterday's highs.
This decline comes despite OPEC+ and its allies' decision to increase production by only 137,000 barrels per day, the same rate as in October and significantly less than previous expectations of a larger increase.
Price Pressure Factors
There are multiple factors weighing on oil prices:
• Increased global supply due to rising Venezuelan exports.
• Resumption of Kurdish crude flows via Turkey.
• Unsold barrels from the Middle East for November loading.
Russian Support and Future Prospects
Risks to Russian supply provided some support to prices after a Ukrainian drone attack on the Kirishi oil refinery shut down its most productive distillation unit. Recovery is expected to take about a month, temporarily reducing regional supply.
Ultimately, the oil market appears to be facing a difficult equation, as the OPEC+ decision is no longer sufficient to balance ongoing concerns about a supply glut and weak global demand, amidst continued concern about global economic indicators.
