On Sunday, December 4, OPEC will meet to discuss whether to increase or cut oil production. It might also maintain the production at the present level. The meeting, which was originally scheduled to take place in Vienna, will instead take place virtually. Saudi Arabia allegedly said this week that the group would expand output by 500,000 bpd. On the rumor, WTI Crude Oil’s price dropped by $4 and oil swiftly recovered its losses.
However, “sources” claim that OPEC will maintain output as the meeting approaches. This comes after OPEC shocked the markets by reducing production by 2,000,000bpd in October. OPEC is likely to maintain output at current levels given the uncertainty in China, which is working to rebuild its manufacturing sector. Fears of low demand, which would cause the price to drop, have been fueled by lockdowns and restrictions in China.
However, China has recently unveiled a number of fresh initiatives aimed at easing COVID limitations, particularly in Zhengzhou, a city known for its manufacturing. In addition to taxis and subways, stores and movie theaters will soon reopen.
On the other hand, China’s NBS Manufacturing PMI for November was made public on Wednesday. Compared to the predicted value of 49 and the prior reading of 49.2, this print was 48. Since April, this is the lowest print. The Committee may wait for the dust to settle before altering output because to slower manufacturing and uncertainties about Covid in China.