Oil prices rose on Friday on expectations that OPEC+ will discuss production cuts at its Sept. 5 meeting. However, the market is concerned about quarantine measures in China and weak global economic growth. Why is oil rising in price?

November Brent crude futures closed 66 cents higher at $93.02 per barrel, and October WTI crude futures closed 26 cents higher at $86.87 per barrel. 

Why is the cost of oil rising? 

On Monday, quotations already hit $94.98/bbl for Brent (+2.12%) and $88.61/bbl for WTI (+2%).

On a weekly chart, WTI futures traded above the prior week’s highs and then retreated to close below last week’s closing levels. This is a bearish signal, notes Eli Tesfaye, market analyst at RJO Futures.

“If you exclude the weekly high and low, closing lower indicates a downside reversal — it indicates that there is weakness present, that the market is weak,” he explains.

The OPEC+ alliance is likely to decide at Monday’s meeting to leave oil production quotas unchanged in October. That’s what three knowledgeable sources told Reuters. However, other sources do not rule out the cartel and its allies cutting production to support prices, which have retreated from the highs reached earlier this year.

Last week, OPEC+ revised its demand forecast downward. The alliance now expects oil market demand to lag supply by 400,000 barrels per day in 2022, versus the previous forecast of 900,000 barrels per day. OPEC+’s baseline scenario for 2023 assumes a 300,000 bpd supply gap in the global oil market.

Earlier, we reported that the European energy crisis of 2022 is forcing countries back to oil and coal.