As OPEC Reduces Output, Crude Oil Gets A Booster

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As OPEC Reduces Output, Crude Oil Gets A Booster
07 Oct 2022
5 min read

News Synopsis

As of 10 a.m. on Thursday, November crude oil futures on WTI were trading at $87.89, up 0.15 percent, and December Brent oil futures were trading at $93.49, up 0.13 percent. On the Multi Commodity Exchange (MCX), October crude oil futures were trading at $7,178 at the start of trade on Thursday morning, up 0.18 percent from the previous close of $7,165. November futures were trading at $7,138, up 0.15 percent from the previous close of $7,127.

The Vienna Organization of the Petroleum Exporting Countries OPEC+ meeting decided to cut production starting in November. Major crude oil producer Saudi Arabia claimed that the weakening global economy and interest rate increases in several western countries were responsible for the reduction in production.

However, this choice did not sit well with the US, a significant consumer country. According to reports, the United States US administration will discuss measures with the US Congress to lessen OPEC+'s impact on oil prices.

The US EIA (Energy Information Administration) reported a decline in crude oil inventories in its petroleum status report for the week ending September 30 which was published on October 5. According to the report, US commercial crude oil stockpiles fell by 1.4 million barrels from the previous week (excluding those in the strategic petroleum reserve).

US crude oil inventories were 429.2 million barrels, which was nearly 3% less than the five-year average for this time of year.

Last week, US crude oil imports decreased by 0.5 million barrels per day from the week before, averaging 5.9 million barrels per day. The total amount of goods delivered in the US over the previous four weeks averaged 20 million barrels per day, a decrease of 3.8% from the same time last year.

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