The Day at a Glance | November 4 2021

The Top

*OPEC+ is expected to confirm gradual increases in crude oil production today, despite U.S. pressures to do so at a faster pace.

*Morena and allies agree to not discuss Electric Power Reform until 2022.

*Bank of England surprised markets by leaving interest rates unchanged.

*Inflation among OECD member countries reached 4.6% in September, its highest level since 2008.

*The FED will be patient in its process of increasing rates.

*Jobless claims in the U.S. continue to fall. 269 thousand were logged last week; the lowest figure since the pandemic began.

Economic environment

OPEC+ denies modifying its plans. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) will hold its monthly meeting today in order to determine the pace at which daily crude oil production will be carried out. The original plan is to maintain an increase of 400 thousand daily barrels for the last month of the year and continue at said pace until the beginning of 2022. However, the organization has recently been pressured by Biden`s administration to increase production at a faster pace, between 600 and 800 thousand daily barrels. Growing demand after the economic reopening has caused an unbalance between supply and demand in the crude oil market, which has boosted energy prices to their highest levels since 2014. High energy costs have started impacting inflation, threatening to transfer to other goods and trigger social unrest. Japan and India have joined the U.S. in calling for crude oil production to increase at a faster pace as the energy crisis could hinder economic recovery. Nevertheless, members of OPEC+ don`t wish to give in to these pressures. Kuwait, Iraq, Argelia and Nigeria have asked the organization to leave plans unchanged. They consider that any changes made today could be removed in the future as the pandemic still clouds the sector`s outlook. With few members being in favor of changing said plans, it`s likely that the plan to increase production will stay in place throughout the rest of 2021, which will keep the market with a production deficit.