Agreement in works to curtail crude production?

January 28, 2015 08:04 AM

Is OPEC getting ready to declare a cease fire in the crude oil production wars? OPEC Secretary-General Abdullah al-Badri said that a bottom in oil may be near and high level rumors of meetings between OPEC and Non-OPEC members are creating speculation that there may be some type of agreement in the works to curtail production. Even Saudi Aramco said it would postpone some projects as it appears low oil prices are even making some Saudi expansion unprofitable. 

While there have been many denials the talk has been making the rounds and it offered oil some support aided by the weakened dollar. Yet with U.S. oil supply rising over 12 million barrels yesterday, according to the American Petroleum Institute, and rising Iraqi production, it is unclear as to how they can structure a cut that will make a difference in the growing global oil glut.  

Falling oil prices are causing a problem for the Federal Reserve. The Feds mantra that on balance the break in oil prices has been a good thing for the U.S. economy is being called into question after Caterpillar cut its 2015 profit outlook because the plunge in oil prices would hurt its energy equipment business. 

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About the Author

Phil Flynn is a senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. Phil is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets.