The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil inched down, by $3.18 (+3.6%) to $84.37 per barrel in November. That decrease occurred within the context of a noticeably weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of September’s decrease of 131,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.6 million BPD), and accumulated oil stocks that slumped to the bottom of the five-year average range (November average: 432 million barrels).
Selected
highlights from the 2 December 2022 issue of OilPrice.com’s Oil &
Energy Insider include:
“Every month that OPEC+ meets to revisit its production strategy, the oil community carefully watches every single utterance. The switching from a physical meeting in Vienna to an online conference call has led most analysts to believe the most likely outcome will be a rollover of production quotas and that there will not be any drastic moves happening on [4 December],” wrote Editor Ton Kool; those expectations were borne out. “With the EU having tentatively agreed to an oil price cap level for crude, we might be in for a surprise at the OPEC meeting. In the meantime, however, OPEC+ has been hugely aided by rumors circulating of China's easing of lockdown restrictions, with oil prices set to close out the week with a significant gain.”
EU Agrees to $60 per Barrel Oil Price Cap. Member states of the European Union have tentatively
agreed to a $60 per barrel price cap on Russian seaborne oil, coming into
effect December 05, with an adjustment mechanism that would seek to keep the
cap at 5% below market price.
Global Food Prices Continue Downward Slump. The UN Food and Agriculture Organization stated
its price index that tracks most globally traded food commodities fell
marginally to 135.7, marking the eighth straight monthly decline and moving
back into territory seen exactly a year ago.
US Senate Votes to Override Rail Strike. Voting
80-15 to override union objections to a proposed rail worker contract, the US
Senate has used its authority under the Railway Labor Act to allay a nationwide
rail strike that was set to begin on December 9, voting down two amendments
that would have softened the blow.
Russian Ammonia Deal Almost Done. According to UN aid chief Martin Griffiths, a deal to resume exports of Russian ammonia via pipeline to a Black Sea port in Ukraine is now close, a deal that would alleviate the huge pressure on nitrate fertilizers across the globe.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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