The oil price has been quite volatile this week. A new meeting of OPEC+ initially caused a rise in the oil market. However, due to disagreement about a possible reduction in the cartel's targets, the oil price has fallen again.
The oil price has climbed out of last week's trough, but is currently trading lower again. On Thursday, November 16, oil traded at $77,42 per barrel. On Tuesday, November 21, the oil price rose to the highest point of the week. The Brent benchmark reached $82,45 that day. Since then, the oil price has fallen considerably again. At the time of writing (Thursday, November 23), the price of oil was $81,01.
The oil price volatility is the direct result of speculation about possible new measures that the OPEC+ cartel could announce at the next meeting. Several sources reported to Reuters on Friday, November 17, that the cartel is considering a further reduction in production. The impact of the expectation is reinforced by an earlier analysis by eight prominent analysts that OPEC is likely to adjust supply further downwards.
The analysis follows a sharp drop in the oil price. In September, the price of oil seemed to be on the rise to a level of $100. This is a significant limit as Saudi Arabia needs a price at this level to pay for its state finances. However, since the end of October the price has fallen sharply again. On Thursday, November 16, the oil price had fallen by as much as 17% compared to September 18, the day when the oil price was at its highest level since November 2022.
Conflict
However, oil prices fell again after OPEC+ decided to reschedule the meeting due to conflicts within the bloc. According to several sources, the Saudi government has reacted with anger to the unwillingness of African countries to lower their targets. The Gulf state is no longer prepared to unilaterally reduce international oil supplies. Some analysts even indicate that Saudi Arabia may want to reverse the target reduction by 1 million barrels if the countries do not reach a solution. .
However, anonymous sources soon reported that Angola and Nigeria had opposed lower targets. When this news came out, the market seemed no longer convinced that the disagreement between the countries would significantly affect the market. Angola and Nigeria are among the smaller producers in the trading bloc. Analysts therefore believe that Saudi Arabia will be able to impose its will on African countries.
Remarkably, despite the higher price of oil, the price of diesel is slightly lower than a week ago. On Thursday, November 16, diesel traded for €132,68 per 100 liters. On Wednesday, November 22, the price of large quantities of diesel had fallen to €132,04.