Since hitting a peak in prices on March 18 the spot WTI contract has shed about $4 per barrel as the market continues to trade in a battle between those who view the potential production freezing deal (if agreed) as a means to accelerate the global rebalancing of the oil market versus those who are focused on the reality that the global overhang is not going to clear for the foreseeable future.
Fed Chair Janet Yellen became a friend to the commodity markets as she was just dovish enough to inspire a rally. Her comment yesterday that central bankers will “proceed cautiously” in raising interest rates because the global economy presents heightened risks was enough to get the complex going. After Yellen spoke, the dollar fell, the euro rose and commodities like gold and silver started to rise. Crude oil, of course, was a little reluctant because of fears of the ongoing oil glut, but the American Petroleum Institute (API) supply report was not as bad as feared.
OPEC member Libya does not plan to attend an April 17 oil producer meeting about freezing production to support prices because it wants to increase output when the situation allows, a Libyan OPEC delegate said.
Oil prices jumped more than $1 a barrel on Tuesday, pushing North Sea Brent and U.S. light crude to 2015 highs, after protests stopped crude flows to the eastern Libyan oil port of Zueitina, hampering exports.
Protestors in Libya have shut down a pipeline to a chief export port urging higher overnight pricing. This latest event in the war torn country has reduced her oil output to less than 30% of what it was five years ago.