February 1 – Day X: OPEC+ and Fed meetings to reveal oil market prospects
The meetings of OPEC+ and the Fed will become important for the whole world. It is because of the decisions that the negotiators will make tomorrow, February 1, that changes in the huge oil market may occur.
Details are written by the FBA “Economy Today”.
On January 31, 2023, benchmark Brent reached $84.79 per barrel. According to Oil Price, the commodity has not shown a positive trend since January 27, when its price reached $89 per barrel. Analysts at Reuters believe that this trend is due to two things: the unrest of traders due to the upcoming Fed meeting (February 1), during which the value of money in the US economy will be established; significant volumes of oil supplies from the Russian Federation to the world market. These factors could even outweigh the hopes for China’s economic recovery. “The oil market is dominated by a downtrend – in the run-up to the Fed meeting, risk-free transactions prevail, and this happens simultaneously with the strengthening of the dollar,” said Tina Teng, an expert at CMC Markets.
But do not forget that market analysts will also follow the meeting of energy ministers of OPEC + members, which will also be held on February 1. The countries that signed the agreement will agree on new quotas for the extraction of black gold. The last time they were changed in October, when the parties to the agreement reduced them by 2 million barrels, with a real decrease in world production by 1.1 million barrels. This decision is due to the fact that the majority of states have not fulfilled the previous agreements. In the West, they want to achieve an increase in OPEC + quotas, but such a decision is unlikely to suit Saudi Arabia and the UAE.