Despite OPEC+ decision, oil companies might witness weekly decline since November

The Organization of Petroleum Exporting Countries and its allies (OPEC+) decided to maintain its production policy on Friday, February 2, which led to a minor increase in oil prices. However, the benchmarks continued to decline on a weekly basis due to concerns about China’s demand growth. As talks move closer to a potential agreement to pause the Israel-Hamas battle, which might be a critical step toward resolving the conflict, oil is expected to see its largest weekly loss since early November.

US West Texas Intermediate crude futures increased 23 cents, or 0.3 percent, to $74.05, while Brent crude futures rose 27 cents, or 0.3 percent, to $78.97 a barrel. Monday’s trading saw the benchmark price for Brent get close to $85 per barrel.

West Texas Intermediate is expected to decline by roughly 5% every week after trading in a small range of $74 per barrel. According to a Bloomberg story, negotiations for a truce and the release of the hostages are still in the early phases.

According to two OPEC+ sources cited in a Reuters story, the organization will decide in March whether to continue the voluntary oil production limits that were implemented during the first quarter of the year.

Before the announcement on Wednesday that interest rates had peaked and would likely decline in the months ahead due to declining inflation and expectations of continued economic expansion, oil prices had already risen. Powell is the chair of the Federal Reserve.

It will take time to determine if the evidence supports a loosening of monetary policy, but Powell stated that the Fed’s interest rate target is “probably at its peak for this tightening cycle” and that rates will likely be lowered “at some point this year.”