The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell by $7.95 (-9.3%) to $77.69/barrel in November. That retreat occurred within the context of a weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of August’s dec6rease of 789,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.1 million b/d), and accumulated oil stocks that continued an upward trend -- to near the midpoint of the five-year average range (November 2023 average: 443 million barrels).
Selected
highlights from the 01 December 2023 issue of OilPrice.com’s Oil &
Energy Insider include:
“Oil markets were left both confused and underwhelmed by the OPEC+ decision to cut 2.2 million b/d in 1Q2024, with oil prices falling toward a weekly loss,” wrote editor Michael Kern. “Oil markets welcomed the new OPEC+ deal that pledged 2.2 million b/d in voluntary cuts for 1Q2024 in a very lukewarm manner, with Brent erasing all its earlier gains and dropping back to $81 per barrel. With even the most seasoned industry watchers starting to lose track of which country will be cutting what amount against which reference level, the production target confusion was aggravated by the fact that markets expected deeper cuts, going over and above what Saudi Arabia or Russia have already curbed from their output.
OPEC+ Cuts Production Further. Members of the OPEC+ oil group agreed
to voluntary production cuts totaling 2.2 million b/d for Q1 2024 as the
group’s de facto leader Saudi Arabia rolled over its current voluntary cut of 1
million b/d and Russia widened its pledge to 500,000 b/d.
Brazil to Become Member of OPEC+ Family. South America’s largest oil producer Brazil is set
to officially become a member of OPEC+ [as an observer]
from January 2024 even though it would not join the oil group’s ongoing round
of production cuts, seeing output soar to all-time highs in recent months.
Referendum Raises the Specter of a Venezuela-Guyana War. Venezuela will carry out a referendum [since approved] on its territorial dispute with Guyana over the contested oil-rich Essequibo territory on December 3, leading to a notable uptick in military activities in the wider region.
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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