Oil falls 5% on growing inflation fears, OilPrice reports.

The recent oil price surge triggered by rumors of an impending OPEC+ production cut has hit a ceiling and even though the meeting is just a week away, focus has shifted towards aggravating macroeconomic environment, dragging ICE Brent down to $100 per barrel. 

Inflation has roared back into public debate, however, this time around it is not the United States in the limelight but Europe. With almost every single major country seeing double-digit inflation and still not yet seeing the peak, the European Central Bank is already testing the idea of a steeper-than-expected interest rate hike of 75 basis points. And this might still be far from the end, OilPrice said. 

OPEC+ supply cuts getting real. With most of OPEC+ heavyweights continuing to bemoan the alleged disconnect between paper and physical oil markets, with the United Arab Emirates and Nigeria joining the ranks of such countries, the chances of seeing a concerted production cut are increasingly higher. 

IEA eyes more SPR releases. With the 180-million-barrel U.S. SPR release coming to an end in November, the head of IEA Fatih Birol advocated more strategic stock releases, saying that members should consider them whenever the prospect of supply disruption emerges. 

India to double down on petrochemicals. India’s leading downstream firm Reliance Industries will invest $9.4 billion over the next 5 years to maximize oil-to-chemicals refining as well as to ramp up production of green hydrogen and solar modules.

France warns industry they will be hit first. The French government urged companies to draft energy savings plans by next month, warning they would be the first to feel the impact of power rationing and adding the state would lead the way with its plan to curb energy usage by 10%. 

German power prices can’t stop soaring. Rising for eight consecutive trading sessions already, German benchmark power prices for annual delivery in 2023 have surpassed the record €1000 MWh threshold this week, despite falling spot gas prices and water levels along the River Rhine increasing on the back of weekend rain.