Opec Delays Increased Oil Production

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Opec Delays Increased Oil Production

Opec+ Postpones Plans To Increase Oil Production

According to commodity strategists from TDS, OPEC+ has decided to throw away its plan of increasing oil production. The initial plan was to remove some of the supply cuts and increase the supply of oil in the market.

However, OPEC+ has now decided to postpone its plan for at least 3 months. In the short-term, this will provide some support to the oil prices. However, the risk premia from the energy supply is still present and isn't going anywhere anytime soon.

Oil Prices Recieve Temporary Support

TDS added that their model hints that the risk premia from supply will remain a key factor. This comes even after the OPEC+ has decided to support the oil prices by delaying its plan.

Other factors which are acting as a tailwind for the supply side are the geopolitical risks. This has also put the focus on the return of Trump as the next president.

Trump's plans include higher tariffs and putting maximum pressure on the export of Iran crude products. This could further put pressure on the oil market could drive the prices higher.

But at this stage, all of this is speculation and we will have to wait until Trump actually announces these measures as a president. He has said many things, and it could just be the election talk to win over the voters.

Meanwhile, it seems that China has a surprise for the oil markets. For example, the position of Chinese traders in the base metals shows it is more of long-term acquisitions ahead of the Economic Work Conference.

Overall, oil prices have received temporary support, but it still doesn't mean smooth sailing for oil. The long-term view is still negative, as the top economies are now moving away from fossil fuels like crude oil. If this trend is sustained, the demand for oil will only keep moving lower.

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