Crude futures rise on potential supply cuts

Front-month ICE Brent has gained by $0.70/bbl on the day, to $89.60/bbl at 09.00 GMT.

PHOTO: Reports suggest that OPEC+ is planning a substantial output cut at its first face-to-face meeting since the Covid-19 pandemic. Members states will convene in Vienna, Austria tomorrow. Getty Images

Upward pressure:

OPEC and its allies (OPEC+) are considering an output cut of more than 1 million b/d at its meeting in Vienna, Austria tomorrow, according to multiple reports citing OPEC+ sources.

This will be the oil cartel’s biggest cut since April 2020, when the Coronavirus pandemic hit the oil industry and Brent prices plunged as low as $9.12/bbl. A historic cut of 9.7 million b/d was made by OPEC+ to prop up falling prices, equivalent to 10% of global production.

Downward pressure:

Excessive monetary tightening is inflicting “worse damage” than the 2008 financial crisis and Covid-19 pandemic shock in 2020, says a United Nations agency. The UN Conference on Trade and Development (UNCTAD) has warned in its annual report that advanced economies must remediate policy course corrections to avoid a global recession and prolonged stagnation.

The International Monetary Fund’s managing director Kristalina Georgieva has echoed UNCTAD's caution, saying fiscal policies should be in line with tightened monetary policy to prevent a global recession, but it is likely that there some countries will go into recession next year.

By Konica Bhatt

Please get in touch with comments or additional info to news@engine.online