Last year, the Saudi Arabia-led OPEC embarked on a strategy of keeping its output high in a bid to defend-and win-market share.
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“OPEC member comments leading into the December 4 meeting are likely to continue to drive sentiment”, ANZ said in a note on Tuesday. Prices rallied briefly after Saudi Arabia said in a statement the kingdom remained ready to work with other producing and exporting countries to stabilize prices. Supply may swell further next year if Iran resumes sales that were halted by sanctions.
“News of a military jet crashing in Syria is a reminder that there is still substantial risk in the Middle East”, said Bjarne Schieldrop, the Olso-based chief commodities analyst at SEB. “We might be looking for the supply surplus to continue through 2016 and through the first half of 2017”.
On Monday morning, West Texas Intermediate crude oil futures surged into the green, after being down by about 2%, to as high as $42.75 per barrel.
“The main players in the petroleum market must certainly reach an agreement about the levels of production”, Algerian Prime Minister Abdelmalek Sellal said.
Futures rose as much as 1.2 percent in NY. The Organisation of Petroleum Exporting Countries (Opec) should make room for increased Iranian production, the nation’s Oil Minister Bijan Namdar Zanganeh said.
Opec has pumped above its collective target for the past 17 months, according to data compiled by Bloomberg. “All of the expectations are for no change of policy”. Iraq, which has provided a glut of oil seems to be incapable to work on the production and selling of the product as they are short of funding due to the ominous presence and threat that the Islamic State poses.
Last week, the price of Brent crude fluctuated between $43-$45 per barrel. Inventories in developed countries have expanded to a record of nearly 3 Bbbl, the International Energy Agency said November 13.
This week, analysts will be taking cues from USA economic indicators such as manufacturing data, weekly jobless claims, and a forecast for third-quarter gross domestic product. The bearish positions rose by 16,246 contracts for the same period. During this period, gasoline and diesel futures fell more than 8%. The agreement smashed for the firsttime since June below $40 on Friday.
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Benchmark front-month Brent futures for January fell 60 cents, or 1.34 per cent, to $44.06 a barrel, after ending up 48 cents at $44.66 a barrel on Friday.
