18.09.202010:00 Forex Analysis & Reviews: Oil prices skyrocketed after OPEC JMMC meeting

The oil market traded in a positive mood Friday morning. The price of black gold skyrocketed after the results of the meeting of the Joint Ministerial Monitoring Committee (JMMC) on Thursday.

During the discussion, the Cabinet of Ministers of the OPEC Monitoring Committee put forward recommendations to the countries that have ratified the treaty to cut oil production. According to which they should prepare to take the next steps to stabilize the situation on the black gold market, if needed in the near future.

In addition, the deadline for compensating for the current shortfall in the quantitative reduction of production for those countries that had problems with this was extended until the end of this year. Thus, debtors have a real opportunity to cope with their obligations. However, Saudi Arabia's Ministry of Energy expressed hope that the debtor countries will not delay the fulfillment of their obligations and will compensate for everything until December. Note that the total number of shortfalls is about 2.4 million barrels per day. These are the volumes that should be compensated before the new year.

Nevertheless, the Monitoring Committee pointed out the importance of proactive measures that can solve emerging problems before they become more widespread. This means that the countries participating in the OPEC deal will have to respond quickly to changing conditions in the oil market if the situation requires it. And in the conditions of rather limited demand, which is expected in the future, such actions, of course, should be prepared in advance.

The crude oil market reacted well to the news of a reduction in the level of black gold reserves in the United States of America on Thursday. A day earlier, the US Department of Energy presented official data stating that the commercial reserves of raw materials in the state in the past week, ended September 11, became lower by 4.39 million barrels. This moved it to the mark of 496.04 million barrels. The level of gasoline inventories amounted to 231.52 million barrels, which was evidence of a fall of 381,000 barrels. Meanwhile, the level of commercial distillate reserves increased by 3.46 million barrels, which moved it to 179.31 million barrels.

All these rather good data had a positive effect on market participants, which was reflected in the price of raw materials.

The price of futures contracts for Brent crude oil for November delivery on the trading floor in London increased by 0.79% or $0.34, which allowed it to rise to $43.64 per barrel. Thursday's trading ended in the green zone with a growth of 2.56% or $1.08.

The price of futures contracts for WTI crude oil for October delivery on the electronic trading platform in New York also rose by 0.76% or $0.31. Its current level is located around $41.28 per barrel. Thursday's trading reflected a significant increase of 2.02% or $0.81.