Brent clings to 52 dollars while waiting for OPEC+

January 05, 2021 14:30

The price of oil futures returns to register gains today after closing in the red in yesterday's session due to the indecision of the Organization of Petroleum Exporting Countries and their partners (OPEC +) regarding the maintenance of production cuts in February. Brent futures due in March registered a rise of 1.82% at 1:00 p.m. CET slightly above 52 dollars, the same rise that the WTI, the US benchmark, registered at the same time, trading at above 48 dollars.

The market is awaiting the decision of OPEC and its partners, which yesterday did not reach an agreement regarding the maintenance of production cuts in February. The organization fears that new restrictions to deal with Covid-19 infections will further slow down the recovery in demand. Saudi Arabia would be in favor of maintaining the cuts, while Russia would like to increase production. This afternoon a new meeting is scheduled to continue the negotiations.

Source: Admiral Markets MetaTrader 5. Brent Futures Daily Chart. Data range: from November 5, 2019 to January 5, 2021. Prepared on January 5, 2021 at 1:00 p.m. Keep in mind that past returns do not guarantee future returns.

OPEC and its oil-producing partners agreed at their last meeting, in December, to slightly ease production cuts but with monthly reviews in the event of unforeseen events that may affect demand, so as not to flood the market and there with excess supply. 

In 2020, the price of oil fell by just over 20%. The year 2019 ended with a rise of 22%, in 2018 it fell slightly more than 20%, and in 2017 and 2016 it added 17% and 52%, respectively. 

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