OPEC+ Playbook Keeps Oil Prices North

OPEC has not increased output as quickly as expected in October, which led to a rise in oil prices in the London trading session on Tuesday morning. In contrast, China increased its operating rates to meet a spike in diesel demand.

At the time of writing, Brent oil futures were trading above $85 a barrel, and WTI futures were up 0.24% to $84.25 a barrel.

Oil prices continue to move upwards within the boundaries of an upward channel.

Although there is a top-side slope to watch and a few levels seen in years past, as long as oil remains above the lower parallel of the channel and its most recent low of $80.5 barrel, the outlook remains intact.

Black liquid hit multi-year highs during the previous week on the back of a rebound in demand post-COVID-19, and OPEC+’s minor monthly production increase of 400,000 barrels per day (bpd) despite rising demands from major consumers.

Saudi Arabia and Iraq supplied more gas than other larger producers, but some of them experienced involuntary outages.

A number of countries, including the United States, Japan, and India, are pressuring OPEC+ to boost output to counter soaring oil prices caused by a global gas crisis, outages, and climate change pledges

Oil prices have been rising steadily, but some analysts cautioned that the price increase is too fast, citing the ongoing global energy crisis and years of underinvestment in capacity.

China, the world’s top oil importer, stepped up refinery production rates so as to avert a diesel shortage ahead of the cartel’s next meeting on Nov. 4. American Petroleum Institute crude oil supply data is now due later today.

Some traders were still eyeing a rising crude oil price, waiting for confirmation after both the EIA crude oil inventory and U.S. production figures showed that demand is strengthening, and OPEC+ is sticking to their gradual 400,000-barrel increase plan.