Fundamental analysis
02 November, 2021
Oil rose towards $85 a barrel on Tuesday, not far from a multi-year high, supported by signs that supply from OPEC and other producers is falling short as demand recovers from the worst of the pandemic. The increase in OPEC’s oil output in October undershot the rise planned under a deal with allies, a Reuters survey found on Monday, due to involuntary outages and limited capacity in some smaller producers. OPEC+, which cut output by 9.7 million barrels per day or about 10% of daily demand in 2020, has been sticking to gradual, monthly production increases of 400,000 bpd, despite calls for more from the United States and other consumers. The alliance is expected to do just that at its next meeting, scheduled for Thursday. Limiting the gain in prices were expectations this week’s snapshot of U.S. supply will show another rise in crude inventories. Analysts in a Reuters poll see an increase of 1.6 million barrels.
