Crude closed down yesterday as OPEC+ met but could not agree on February production levels. The market is up in early trading this morning amid rising tension in the Strait of Hormuz after a South Korean tanker was seized by Iran on Monday. Middle East tensions are often a cause of rising crude prices, and the tanker seizure seems to have contributed to a rise in prices this morning.
Traders hold out hope for a bullish decision from OPEC and its allies as the OPEC+ group continues yesterday’s meeting today. Russia has called for an increase of 500 kbpd in February – the same increase as had been agreed upon for January. Saudi Arabia, however, is calling for more restraint amid growing coronavirus cases worldwide and the discovery of a more transmissible strain of the virus that has countries considering further lockdowns and restrictions. Prince Abdulaziz bin Salman, the Saudi energy minister, urged caution on Monday, saying, “I urge you today not to take for granted the progress we have made as a group over the past year… Do not put at risk all that we have achieved for the sake of an instant, but illusory, benefit.”
In early trading today, crude prices are up. Crude is currently trading at $48.21, a gain of 59 cents.
Fuel prices are up this morning. Diesel is trading at $1.4825, a gain of 2.1 cents. Gasoline is trading at $1.3914, a gain of 1.9 cents.