Saudi Arabia backed out of a deal to freeze crude oil output at the “Doha Initiative” in a sign that the politics of OPEC have changed forever. There seems to be a widened slip from the old energy guard led by Saudi oil minister Ali al-Naimi and the factions led by the new Saudi King Salman.
U.S. equity markets are expected to open slightly lower on the final trading day of the week, as investors eye a number of key economic reports and important meetings of the G20 and major oil producers. Crude oil is trading a little lower so far today having entered into consolidation mode since Wednesday, as traders adopt a cautious approach ahead of Sunday’s meeting of oil producers in Doha.
World stocks rose to their highest level in more than four months on Thursday and the dollar chalked up a third day of gains as markets took a positive view ahead of top policymaker and oil producer meetings.
Production destruction is starting to take its toll as U.S. crude oil output falls below 9 million barrels a day and the International Energy Agency (IEA) is predicting the global oil market will be close to being in balance by the middle of the year. Say "goodbye" to the glut and "hello" to a tighter market ahead as the forces of this year’s oil price crash are now starting to be felt.
After rising to the highest price this year, crude oil prices are starting out the early U.S. trading session in negative territory. The market remains primarily focused on Sunday’s OPEC/non-OPEC meeting with most everything else remaining in the background.