Chat with us, powered by LiveChat

Choose country & language:

Close Icon

Oil prices jump as OPEC+ agrees on production cut

Home >  Daily Market Digest >  Oil prices jump as OPEC+ agrees on production cut

detail_image_market
author_img

Written by:
Myrsini Giannouli

06 September 2022
Share the article

Oil prices jumped on Monday, as OPEC+ members agreed to cut oil production. WTI price jumped briefly above $90 per barrel, before paring some of the day’s gains. If the WTI price declines, it may encounter support near $82 per barrel, while resistance can be found near $98 per barrel and higher up at the $100 per barrel level. 

On Monday, OPEC+ agreed to cut down production by 100,000 barrels per day to offset the potential return of Iranian barrels to oil markets. The organization has seen oil pricing slipping over the past month and has decided to curtail oil production to keep oil prices high. Despite mounting global recession risks, OPEC+ members strive to defend the $100 per barrel key level. 

Low demand in China weakened oil prices due to renewed Covid restrictions and a potential deal with Iran. If the deal goes through, it can add more than a million barrels of oil per day to the global market providing some relief to oil demand.

In addition, G7 finance ministers have agreed to impose a cup on Russian oil prices to reduce Russia's ability to fund its war against Ukraine, potentially driving oil prices lower. In the meantime, however, the energy crisis in Europe boosts oil prices. Gazprom has shut down the Nord Stream 1 gas pipeline indefinitely, and gas prices in Europe have skyrocketed. 

Rising odds of aggressive rate hikes also push oil prices down. Severe rate hikes stifle economic activity fuelling recession fears. The global economic slowdown and recession concerns are decreasing the oil demand outlook, putting pressure on oil prices. Last week, Fed rhetoric remained aggressively hawkish, with FOMC member Loretta Mester stating that she sees the Fed benchmark interest rate rising to 4% and no rate cuts through 2023. 

WTI 1hr chart

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

author_img

Written by:
Myrsini Giannouli

Share the article:

Latest news

main_image_market

Dollar steady ahead of key US economic data

Myrsini Giannouli 28 March 2024
main_image_market

Gold prices advance as US treasury yields decline

Myrsini Giannouli 28 March 2024

Oil prices rise on lower-than-expected US stockpiles

Myrsini Giannouli 28 March 2024

Bitcoin struggles to maintain key $70,000 level

Myrsini Giannouli 28 March 2024
Why TopFX
10-years
13+ years

industry presence
as a Liquidity Provider

Spreads
Spreads
from 0.0 pips

and reliable execution

Segregated
Segregated

client funds

First-class
First-class

customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!

IMPORTANT

The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.

If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.

Don't show this message again

Cookies on TopFX

The TopFX website uses cookies to optimise user experience.

These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.

Manage Preferences

You can customize your selection of which cookies you want to accept.

  • Essential

    These cookies are necessary for the website to function correctly and cannot be switched off.

  • Functional

    Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.

  • Marketing

    These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.