Oil Prices Rise Ahead of OPEC Meeting

The price of oil is on the rise as the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) approaches. After a slight dip in the past few days due to the summit delay, West Texas Intermediate (WTI) and Brent crude both saw gains. WTI, the U.S. benchmark, increased by 0.9% to reach $75.55 per barrel, while Brent crude, the international standard, rose by 0.7% to $80.67 per barrel.

The decision to postpone the OPEC meeting was reportedly influenced by a lack of consensus on restricting oil output. This highlights the conflicting interests among member countries. While all countries benefit from higher prices achieved through collective production cuts, each country also aims to sell as many barrels as possible to maximize revenue.

In addition to internal disagreements, weakening global economic conditions are also influencing oil prices. Deutsche Bank has expressed concerns about a potential U.S. recession next year, while China, the second-largest global economy, continues to experience a sluggish recovery since lifting Covid-19 lockdowns.

Despite the possibility of OPEC declining further output restrictions, experts suggest that there is likely to be a minimum price threshold for oil. The United States has stated its intention to begin purchasing oil to refill its strategic reserves at around $70 per barrel. Other buyers may also enter the market if prices dip slightly further.

While the ongoing discussions within OPEC are currently impacting oil prices, a complete collapse in prices appears unlikely at this point.