After the opening of a new weekly trading session, the price of 1 barrel of oil rallied ahead of the OPEC meetings. The analysts are expecting issues with the increased supply side in the contract with the poor economic conditions.
On Oct 5th, the OPEC+ meeting is scheduled to be held, where the production agreements will be reviewed. Furthermore, the issue of cutting around 1 million barrels per day will also be discussed. If these agenda items are agreed upon, it will definitely help the WTI push higher! However, it could also lead to weaker oil demand due to the higher prices!
Experts believe that in order to remove the bearish trend from the oil market, a production cut will be announced. However, a production cut that is lower than the market expectations might not be enough to attract the bulls! That's why a production cut of around 1 million barrels or more is highly likely!
Another good news that is supporting the bullishness in the oil market is the new quotes for crude oil import/export set by China. Mainland China is planning to revive the economy and spur growth, for which energy will be a major requirement.
To get started, China has issued a crude oil import order of around 2.89 million tonnes which is a major order no matter how you look at it!
According to NASDAQ, this new order will bring the import quotas of crude oil to around 164.6 million tonnes for the year. Earlier, the number was only around 162.2 million tonnes which shows a healthy increase!
Experts have also stated that the oil inventories held by the OECD are declining at a really fast pace which could increase the demand for crude oil in the near term. And when we combine this fact with the proposed production cut, the chances of a bull run in the oil market will increase!