Bulls and bears struggle – no evident winner in sight.

The U.S. president is allegedly heading for the Middle East, likely in an attempt to discuss potential oil output increase with OPEC members, easing some of the upward pressure on oil prices.

OPEC and a group of oil producers, together called OPEC+, earlier this month decided to increase output to 648,000 barrels per day, up from 432,000 barrels per day in July and August. OPEC+ will meet again next week. Market consensus is unchanged production targets, but expect additional volatility around the meeting as comments and news emerge. In connection with the global Covid-19 pandemic, the group of oil producers in 2020 agreed to cut output, but for months now the group has increased output to bring balance in the world thirsting for oil. The agreement officially expires in September.

The latest economic key data from among others the U.S. and Germany came out lower than expected and especially Germany can potentially be affected by Russia’s closing the gas tap to the country, making it uncertain if the country having to decrease its industrial production. This morning, UK retail sales data showed a decline and later today, housing data is released from the U.S. The EU meets these days and will among others discuss status on the Russian war against Ukraine and the consequences this has also for the EU countries.

It looks like the market continues to struggle with weighing the potential global recession against the continued lack of oil – this is likely why oil prices have fluctuated heavily this week and could continue to do so in the coming period.

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