OPEC+ raises oil production number: Market Movers
Well, for market movers, we're going to focus on oil. The OPEC plus oil cartel said on Sunday it would raise production by a further 547,000 barrels a day from September, fully reversing its nearly two-year-long strategy of propping up prices by holding huge quantities of crude off the market. The decision marks the end of an agreement that began in January 2024, under which eight members led by Saudi Arabia, Iraq and the UAE voluntarily cut their daily output by 2.2 million barrels aimed at concerns about the rise of EVs and sluggish oil demand growth in China. The progressive restoration of supplies over recent months has been widely seen as a concerted push by the cartel to reclaim market share. Oil prices fell in response to the announcement, but have remained pretty steady in early trade today. Traders are weighing the possibility that Washington may move later this week against Russian oil flows, including buyers such as India, in a bid to raise the pressure on Moscow to pause the war in Ukraine. Meanwhile, oil giants Chevron and Exxon released earnings reports on Friday that even though both beat expectations, profits at both fell to a four-year low and both saw their share prices falter. Today, both stocks look relatively unmoved by the OPEC plus announcement. On Tuesday, it will be the turn of rival BP to release its results. Its shares are on the rise today after it revealed its biggest oil and gas discovery in 25 years after drilling a successful well in a field off the coast of Brazil. This find comes as BP shifts its strategy to place greater emphasis on oil and gas and less on renewables. The focus for tomorrow's earnings will be the progress the firm is making on a $5 billion cost cutting plan. Activist investor, Elliot Management, has been increasing the pressure on the energy major to rain in operating expenses more aggressively. The US hedge fund has a 5% stake in BP. Now, BP is looking to reach its savings target through a combination of streamlining supply chains, job cuts, exiting parts of the business such as hydrogen and divestments including selling BP's onshore wind assets and spinning off its offshore wind arm. We'll bring you BP's earnings report on tomorrow's show. Make sure you don't miss that.
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