India, the third-largest oil importer in the world, gains from a decrease in prices since it lowers imported inflation.
Global oil prices were higher today due to the upcoming OPEC+ meeting. Oil prices increased by more than $2 a barrel on Friday, reaching $95.44 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) and its partners, collectively known as OPEC+, may choose to maintain current output levels or even reduce production to support prices, despite supplies remaining tight, according to analysts. India, the third-largest oil importer in the world, gains from a decrease in prices since it lowers imported inflation.
“NYMEX crude trades over 1% higher above $88/bbl as market players position for OPEC+ production policy meeting today. There has been a lot of chatter about OPEC’s production cut. However the oil producer group is largely expected to keep productions steady today. Crude is also supported by concerns about Russian supply as G7 countries agreed to impose a price cap on Russian oil however major buyers India and China are not likely to join. Weighing on crude price are demand concerns as China’s virus related restrictions hamper economic activity. Crude may waver ahead of OPEC decision however demand concerns may keep pressure on prices," said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
After reaching multi-year highs in March, oil prices have dropped in the last three months due to concerns that interest rate increases and COVID-19 restrictions in some areas of China, the world's top petroleum importer, may stifle global economic growth and reduce oil consumption.
Russia, being the world's second-largest oil producer and key member of OPEC+, doesn’t support a production cut at this time and will keep its output steady.
Commodity traders will also be monitoring the status of negotiations to reopen the 2015 nuclear agreement between the West and Iran, which have dragged on despite the fact that a deal might enable Tehran to boost exports and boost supplies around the world.
The deal with the closure of investigations by the U.N. nuclear watchdog was rejected by the White House on Friday, a day after Iran reopened the issue, according to a Western diplomat.
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