Venezuela, which receives nearly all of its foreign exchange from oil, is struggling with the world’s highest inflation, a severe recession and chronic shortages of food and medicine.
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OPEC MEETS: Amid little market-moving news, oil was in focus after the Organization of the Petroleum Exporting Countries announced Monday that oil ministers of the 14-nation organization will meet next month, well ahead of their previously scheduled November meeting.
But this isn’t the first time OPEC has promised to talk about restoring stability and order to the oil market. An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran’s refusal to take part of the initiative.
Oddly enough, the Monday rally was largely attributed to the meeting announcement, which was the final sentence of a press release that detailed comments from the cartel’s president, Mohammed bin Saleh al-Sada.
Russian Energy Minister Alexander Novak said Monday that Moscow would be willing to discuss a freeze with OPEC if prices fall further. WTI oil futures were up 3.0% to $43.1 per barrel while Brent crude futures were 2.6% higher to $45.4 per barrel.
Some OPEC delegates said they don’t expect a decision or recommendation to be made during the side meetings in Algeria.
“These are more of an outcome resulting from weaker refinery margins, inventory overhand – particularly of product stocks, timing of Brexit and its impact on the financial futures markets, including that of crude oil”, he said.
After his declaration, Brent crude, the worldwide benchmark for oil, surged from $42 to $45.33 a barrel – almost a three percent increase. WTI hit April lows beneath $40 a barrel last week.
“There is not much to suggest that observers see anything of substance coming out of these informal sideline chats in Algeria”, she said.
This expectation of a higher demand has led analysts to believe that oil prices are bound to rise during the last quarter of this year, he stated.
Lamb said the market is seeing a “natural level of short covering by some hedge funds after a decidedly negative outlook shift in recent weeks”.
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In the near term, the market will be monitoring movements of USA gasoline and crude stocks movements, which likely shrunk last week by 1.6 million barrels and 1.75 million barrels, respectively, according to a survey of analysts by S&P Global Platts. “These are all latent or actualized headwinds to price growth”. He cited concerns over rising US oil rig counts and weakening energy demand as catalysts for such actions from OPEC.
