Oil rose to start the week ahead of an OPEC+ meeting on supply and as investors weighed the fallout from Europe’s energy crisis.
(Bloomberg) — Oil rose to start the week ahead of an OPEC+ meeting on supply and as investors weighed the fallout from Europe’s energy crisis.
West Texas Intermediate advanced toward $88 a barrel after sinking almost 7% last week on concerns that slowing global growth and anti-virus lockdowns in China would hurt demand. The Organization of Petroleum Exporting Countries and allies including Russia will convene later Monday to set production levels for October after Saudi Arabia flagged the possibility of a cut.
Crude futures have retreated by about a quarter since early June as the global economy slowed and central banks hiked interest rates, erasing all of the gains since Moscow’s invasion of Ukraine. Last week, Group of Seven ministers endorsed a US-led initiative to try to cap the price of Russian oil. Hours later, Russian energy giant Gazprom PJSC said gas flows along a key pipeline to Germany would not resume, deepening the region’s crisis heading into winter.
Ahead of the OPEC+ gathering, most market watchers said that they expected no change to supply at this meeting. Among them, JPMorgan Chase & Co. said September’s output quotas would be rolled forward into October as summer surpluses would turn into deficits, rendering supply cuts unnecessary.
Oil market time spreads have been volatile in recent weeks. Brent’s prompt spread — the difference between its two nearest contracts — was $1.37 a barrel in backwardation, compared with $2.16 last Monday and 67 cents two weeks ago.
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