While quotas will be decided at the group’s official meeting in November, Nigeria and Iran have said they are exempt and Iraq has said it doesn’t accept OPEC’s estimates of its production levels.
Advertisement
The OPEC talks have put a cushion under oil prices.
The future of crude oil prices therefore lies in the balance.
Both Brent crude and WTI started the week around $46/bbl and $44/bbl and by Friday prices had risen to $49/bbl and $48/bbl respectively.
The crude oil futures market featured two-sided trading on Monday before November WTI Crude Oil futures closed at $48.81, up $0.57 or +1.18%.
Oil prices fell almost one per cent on Tuesday on news that Iran and Libya have continued to increase production, overshadowing an OPEC agreement struck last week to freeze output levels. Still prices have continued to rise.
Last week’s OPEC agreement reached at the Algiers conference to cut oil production caught the market by surprise. The deal, which will remain in effect for six months, will boost oil prices by $10 to $15 a barrel above the average September price, he said.
Brent crude oil prices steadied above $50 a barrel on Monday, supported by a planned production cut by exporter club OPEC, but still under pressure from an overhang in supply that now exceeds consumption. Oil market traders and investors are still excited about the news, and this excitement could drive oil prices to levels around $55/bbl in the coming weeks.
USA crude stocks likely rose by 2.6 million barrels last week, after four unexpected weeks of drawdowns, a Reuters poll showed. The U.S.is pumping at a rate of 8.5 MMbopd, weekly data from the Energy Information Administration show.
Oil prices edged up on Wednesday ahead of a US crude inventory report, as investors continued to hold out hope for a supply deal by the Organization of the Petroleum Exporting Countries.
IBD’s TAKE: OPEC recently agreed to cut production after forcing US producers to trim output, though they have proved more resilient than expected and are already ramping up drilling again.
The overall higher crude prices since the announcement of a potential supply cut by OPEC has hit profits in the refinery sector, where crude is the main feedstock.
Advertisement
Iran has started the gas condensate (ultra light crude oil) sell to BP in the form of spot cargo, Mohsen Ghamsari, director of worldwide affairs at National Iranian Oil Co (NIOC), said.
