Oil falls below $ 89 as Reuters sees a faster rise in OPEC +

Author: Alex Lawler

LONDON (Reuters) – Oil prices plummeted to a seven-year high on Tuesday, with speculation that OPEC + could go further than expected to add to this week’s meeting, and expectations of a rise in US inventories.

Despite the fact that the Organization of the Petroleum Exporting Countries and allies, known as OPEC +, are expected to maintain a policy of gradual increase in production at a meeting on Wednesday, Goldman Sachs (NYSE 🙂 said there was room for further action.

“We see the potential for faster growth at this meeting, given the pace of the last rally and the likely pressure from importing countries,” the bank said in a Jan. 31 report, adding that the result remains “equally balanced.” a quick response and an increase in the status quo.

It fell 51 cents or 0.6% at $ 88.75 a barrel to $ 1238 GMT. US West Texas Intermediate crude fell 63 cents, or 0.7% to $ 87.52.

Oil was also under pressure as this week’s US supply reports show a rise in crude storage. Analysts expect crude stocks to rise 1.8 million barrels.

The first of two supply reports this week, from the American Petroleum Institute, is at 2130 GMT. [EIA/S]

Brent and October 2014 had their highest levels since Friday, at $ 91.70 and $ 88.84, respectively. January saw a 17% drop in supply shortages and tensions between Russia and the West in Ukraine and the Middle East.

OPEC understood the production boost promised in January, according to a Reuters poll, and other analysts hoped the rally would last. [OPEC/O]

“The oil market is currently on the rise with no reserves,” said PVM oil broker Tamas Varga. “International tension, the perception of tight supply and the cold winter are the most important factors in the strength.”

Rising differentials in the physical raw market raise concerns about tight supply, Varga said. One of the crudest in North Sea at the base of Brent, Ekofisk, was the highest in a decade on Monday.