Results for: OPEC

US stock markets experienced a downturn on Thursday, driven by signs of a cooling labor market and rising oil prices. The ADP report revealed a slowdown in private sector job growth, while a stronger-than-expected services sector provided some relief to recession fears. The S&P 500 index dropped below the 4,500 support level, extending weekly losses to 2.9%. The Dow Jones slid 0.8%, while small-cap stocks fell 0.6%. OPEC+’s decision to delay an oil production increase further pressured investor sentiment, pushing up crude prices. Crypto assets also weakened, with Bitcoin falling 3%.

Citigroup analysts predict that oil prices could plummet to $60 per barrel by 2025 if OPEC+ doesn’t further cut production. Increased supply from non-OPEC countries and waning demand are contributing factors. The bank recommends selling oil when prices approach $80 per barrel.

Oil prices dropped on Wednesday as OPEC+ members discussed potentially delaying a planned output increase in October. Concerns about weakening global demand and the potential resumption of Libyan oil exports fueled the decline. The news followed a broader sell-off in world markets driven by weak economic data from the U.S. and China.

Brent crude oil prices have faced significant selling pressure, dropping to $77.21 per barrel due to increased supply forecasts from OPEC+ members and weak demand signals from major economies. While Libya’s production disruptions offer some temporary support, the overall market sentiment remains bearish.

OPEC (Organization of the Petroleum Exporting Countries) and its allies, collectively known as OPEC+, play a significant role in regulating the global oil market. Founded in 1960, OPEC comprises 12 member countries, accounting for approximately 30% of the world’s oil production. OPEC+ includes 10 additional non-OPEC oil exporters, including Russia, and represents around 41% of global oil output. The group’s primary objective is to manage the supply of oil to the global market, influencing prices and affecting the global economy.

OPEC has requested that Iraq resume oil exports from Kurdistan to the Turkish port of Ceyhan. According to Iraqi media, the request has been forwarded to Iraqi Prime Minister Mohammed Shia al-Sudani. The news comes just a week after the Iraqi federal government announced it was repairing its own oil pipeline to Turkey, signaling a potential end to Kurdish semi-autonomy.

According to Citi, the energy sector is expected to maintain its strong performance due to elevated oil prices driven by geopolitical risks. The sector has outpaced the broader market this year, driven by rising energy demand and production cuts from OPEC+. While the oil market has cooled following tensions between Israel and Iran, prices remain significantly higher than last year. Citi analysts foresee continued support for oil prices in the short term due to global economic growth and geopolitical uncertainties, despite reduced demand growth projections for 2025.