Oil Prices Surge as OPEC Extends Production Cuts
Oil prices experienced a notable increase today following the announcement that eight OPEC Plus countries have extended their production cuts by 2.2 million barrels per day. This decision comes amidst weak demand and rising supply from outside the organization. Brent crude futures rose by $1.18, or 1.61%, reaching $74.28 per barrel, while U.S. West Texas Intermediate (WTI) crude saw a decrease of $1.19, or 1.73%, settling at $70.69.
The OPEC+ coalition, which includes OPEC members, Russia, and other allies, had previously planned to raise production by 180,000 barrels per day in December. However, the recent decision to extend the cuts for another month reflects a strategic shift aimed at stabilizing prices in light of declining demand. Analysts from ING noted that this postponement indicates a willingness from OPEC+ to support prices more robustly than anticipated.
The eight member countries involved in this extension include Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman. The remaining cuts of 3.66 million barrels per day will remain effective until the end of 2025, as agreed upon in June. A crucial OPEC+ meeting is scheduled for December 1 to discuss production policies for 2025.
Gold Prices Stabilize Ahead of Critical Economic Events
In parallel to the oil market, gold prices remained steady as investors brace for a significant week in the global economic landscape, highlighted by the upcoming U.S. presidential elections and potential interest rate adjustments. Spot gold saw a slight increase of 0.1%, reaching $2,738.29 an ounce, following a peak of $2,790.15 recorded last Thursday. U.S. gold futures closed at $2,747.50.
As the U.S. presidential elections approach, polls indicate a tight race between Democratic candidate Kamala Harris and Republican Donald Trump, a factor that could heavily influence gold prices. Market participants are also closely monitoring the Federal Reserve's upcoming decision on interest rates, with a 98% probability forecasted for a quarter percentage point cut this week, according to the FedWatch tool.
Other precious metals displayed mixed performances, with spot silver prices rising by 0.8% to $32.68 an ounce, platinum declining by 0.81% to $1,000.47, and palladium increasing by 1.25% to $1,111.28.
