Oil prices rose during today’s trading after 8 OPEC Plus countries extended production cuts by 2.2 million barrels per day, with weak demand and increased supply from outside the group, while gold prices stabilized relatively after a new peak recorded last Thursday.
Brent crude futures for the nearest delivery were up $1.18, or 1.61%, at $74.28 a barrel at the time of writing, while U.S. West Texas Intermediate (WTI) crude was down $1.19, or 1.73%, at $70.69.
OPEC Plus, which includes OPEC countries, Russia, and other allies, was scheduled to raise production in December by 180,000 barrels per day.
This means the group will extend its 2.2 million barrels per day cut for another month, having already postponed an increase in production from October due to low prices and falling demand.
“The postponement until January does not change the fundamentals significantly but may leave the market forced to rethink the OPEC+ strategy,” ING analysts said in a note.
The decision to postpone the production increase came contrary to expectations by some in the market that OPEC Plus would go ahead with the planned production increase.
“The postponement of the production increase means that the group may be more willing to support prices than many think,” analysts said.
Before the decision to postpone the production increase, the eight OPEC+ members ( Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman) were expected to gradually start to abandon the additional voluntary production cuts of 2.2 million barrels per day by increasing production in December 2024 and over subsequent months during the next year.
The remaining OPEC+ cuts of 3.66 million barrels per day will remain in place until the end of 2025, as agreed in June.
OPEC+ ministers are scheduled to meet on December 1 to set production policy for 2025.
Gold prices steadied today as investors prepared for a crucial week for the global economy with the 2024 US presidential election and the possibility of further interest rate cuts.
Spot gold rose 0.1% to $2,738.29 an ounce, having hit an all-time high of $2,790.15 on Thursday. US gold futures settled at $2,747.50.
Hours before the US presidential elections tomorrow, Tuesday, opinion polls reveal a fierce competition between Democratic candidate Kamala Harris and Republican Donald Trump, which could greatly affect gold prices.
Markets are awaiting the Federal Reserve’s decision this week on whether to cut interest rates and statements from Fed Chairman Jerome Powell and other bank officials.
The FedWatch tool showed that economists expect a 98% chance that the Federal Reserve will cut interest rates by a quarter percentage point this week.
As for other precious metals, their performance was as follows:
- Spot silver prices rose 0.8% to $32.68 an ounce.
- Platinum fell 0.81% to $1,000.47.
- Palladium rose 1.25% to $1,111.28.
