Nov 22, 2022 - Economy & Business

Oil prices boomerang on OPEC headlines

Data: FactSet; Chart: Axios Visuals

Oil prices whipsawed Monday as news about what the OPEC oil price cartel would decide at its meeting next month sent traders scurrying.

Driving the news: A story in the Wall Street Journal, suggesting that OPEC was considering a 500,000 barrel-a-day increase in production, jolted the crude oil markets at around 9 am ET.

U.S. benchmark crude oil prices fell more than 5% in response, to about $75 a barrel.

Context: The news came as a surprise to oil industry observers, especially in light of the fact that just last month, OPEC and its petro-ally Russia announced plans to cut oil production sharply in an effort to prop up prices.

But, but, but: A statement from Saudi Arabian Authorities later in the day seemed to knock down the Journal's reporting.

What they're saying: “The current cut of 2 million barrels per day by OPEC+ continues until the end of 2023,” Saudi Energy Minister Prince Abdulaziz bin Salman said in a statement issued by the Saudi Press Agency.

  • Oil prices promptly reversed course and surged, briefly going positive before ending the day down less than half a percentage point, at just under $80 a barrel. (They're up another 1% Tuesday morning to about $81.)

The bottom line: If the trading activity is any indication, the actual announcement from OPEC and Russia after a meeting on Dec. 4 in Vienna could be a real market mover.

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