OPEC+ Approaches Preliminary Agreement For Deeper Oil Production Cuts In 2024
Portfolio Pulse from Vandana Singh
OPEC+ is reportedly nearing a preliminary agreement to deepen oil production cuts by an additional 1 million barrels per day, on top of Saudi Arabia's voluntary reduction. This decision could lead to total cuts nearing 2 million bpd for Q1 2024. Oil prices have risen, with WTI at $77.82 and Brent at $83.90. The cuts are a proactive measure in response to expected lower demand and a potential decline in oil prices next year due to abundant supplies and economic downturn.
November 30, 2023 | 5:19 pm
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POSITIVE IMPACT
The United States Brent Oil Fund, LP (BNO) could see a positive short-term impact due to the potential OPEC+ agreement on deeper oil production cuts, which has already led to an increase in Brent crude oil prices.
BNO tracks the price of Brent crude oil. The news of OPEC+ cuts has led to a rise in Brent prices, which directly benefits BNO's performance.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
The Invesco DB Oil Fund (DBO) may experience a positive short-term impact as the OPEC+ decision to cut oil production could lead to higher oil prices, which DBO tracks through futures contracts.
DBO is influenced by the price movements of WTI crude oil futures. The news of production cuts is likely to support higher oil prices, benefiting DBO.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
ProShares K-1 Free Crude Oil Strategy ETF (OILK) could see a positive impact in the short term as the OPEC+ agreement to deepen production cuts may lead to an increase in oil prices, which OILK aims to track without issuing K-1 forms.
OILK's performance is tied to the oil market, and the proposed OPEC+ production cuts are likely to push oil prices up, positively affecting OILK.
CONFIDENCE 80
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
The United States 12 Month Oil Fund, LP (USL) may benefit in the short term from the OPEC+ decision to cut oil production, as it holds futures contracts for WTI crude, which has seen a price increase.
USL's investment in WTI crude oil futures means that any increase in oil prices due to OPEC+ production cuts could have a positive impact on its value.
CONFIDENCE 80
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
The United States Oil Fund, LP (USO) is likely to experience a positive short-term impact as a result of the OPEC+ agreement to implement deeper oil production cuts, which has contributed to higher WTI prices.
USO is directly impacted by changes in the price of WTI crude oil. The news of OPEC+ planning deeper cuts has already led to an increase in WTI prices, which is beneficial for USO.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Credit Suisse X-Links Crude Oil Shares Covered Call ETN (USOI) could see a positive short-term impact due to the OPEC+ decision to cut oil production, which may lead to higher oil prices and potentially increase the value of USOI.
USOI's strategy involves covered calls on oil shares, and higher oil prices due to OPEC+ cuts could improve the performance of these oil shares, positively impacting USOI.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70