Global oil prices moderated on Monday after data from the Chinese government showed gasoline and diesel reserves were substantial than initially thought.
Investors that had thought tight global supply would continue to bolster prices in the near-term quickly cashed in ahead of Thursday’s OPEC plus meeting that could increase production in December through 2022.
Brent crude spot dropped to $83.06 a barrel on Monday at 9:36 am Nigerian time before rebounding to $84.40 per barrel, while the U.S. West Texas Intermediate (WTI) also extended gains after the initial decline observed when the report came out. WTI rebounded from $82.93 per barrel on Monday to $83.15 per barrel.
“Behind the selling was China’s release of fuels reserves, which reflected Beijing’s intention to stabilise oil prices, just like coal prices,” said Chiyoki Chen, chief analyst at Sunward Trading.
“Also, investors took profits ahead of an OPEC+ meeting,” Chen said.
All attentions are now on OPEC plus meeting scheduled for November 4, 2021 to see if they are going to stick to an increase of 400,000 barrels per day supply in December.
On Friday, U.S. Commodity Futures Trading Commission (CFTC) said money managers cut their net long U.S. crude futures and options positions in the week to Oct. 26. Indicating they were wary of OPEC plus decision going into the new year.
The price of crude oil jumped to multi-year highs last week, largely due to OPEC plus decision to maintain its gradual oil supply program rather than just increasing