The markets think little of the OPEC states’ latest decision. The price of crude oil then fell to its lowest level in months. This could benefit German industry.
The oil and electricity price rally after the outbreak of the war in Ukraine showed how important energy prices are. Not only private households, but especially industry are still massively dependent on their prices.
The markets do not believe in a voluntary reduction in oil production
Yesterday, oil prices fell again and fell to levels not seen in five months. A barrel of North Sea Brent then cost just $76.41. The US variety West WTI only cost 71.55 US dollars. The last time oil was available to buy at this price was in July of this year.
The decisive factor for this was the skepticism in the market regarding OPEC’s latest production decisions. The Organization of Petroleum Exporting Countries includes 13 member states whose oil wealth enables them to influence markets. With 40 percent of global production and around three quarters of global oil reserves, countries such as Saudi Arabia, Iran, Iran and Qatar have a say in prices.
OPEC and several other countries actually decided to cut their production volumes last week. But what experience has shown leads to an increase in prices due to shortages turned into the opposite this time.
The USA is opposing it
This is because the reduction is intended to be on a voluntary basis. Many analysts therefore believe that states will not comply. At the same time, it can be assumed that those countries that are not members of OPEC are planning to increase their production volumes. This also includes the USA, whose exports are expected to reach a new record high.
In addition, just a few days ago the USA reported increasing inventories, which is depressing prices. Given the rapid economic recovery in the USA, the dollar remains strong, which also does not please supporters of high oil prices. Added to this is the persistently weak economy in China, which will depress oil consumption.
The economic strength of the USA and the prospect of falling interest rates had recently also driven up the prices of cryptocurrencies. Bitcoin continues to remain above the $44,000 mark.