Crude prices fell on Monday, weighed down by gloomy economic prospects in Europe and Asia and a related strengthening in the U.S. dollar, which makes fuel imports for countries using other currencies more expensive.
Crude oil prices are higher ahead of this morning’s Energy Information Administration oil inventory report after a slightly larger than expected draw in total crude oil stocks reported by the American Petroleum Institute’s late yesterday afternoon. In addition the market remains concerned over the ongoing unscheduled shut-ins in supply from places like Nigeria while oil demand in China increased once again. Overall, the oil market sentiment remains biased to the upside.
OPEC was close to an agreement but failed to get it done. Still, the cartel did elect a new OPEC president and laid the groundwork for a potential emergency meeting in the future. The change in tone at this OPEC meeting seems to suggest that in the future OPEC may find a way to work together.
The Organization of the Petroleum Exporting Countries meeting in Vienna just got a lot more interesting. Saudi Arabia's new oil minister Khalid Al-Fali wants to show a softer side and repair diplomatic damage done that the failed “Doha Initiative.” He said that the Kingdom will back an oil production ceiling at today’s meeting.
Crude oil prices are moving lower for the second day in a row after a string of weekly increases during the last two months. More market participants are currently pricing in a non-eventful OPEC meeting with more of the same as OPEC is most likely to maintain their market share strategy and let the market price of oil eventually move global oil supply and demand back into balance.
The big OPEC meeting is about to start and already comments from OPEC leaders is impacting crude oil prices. Yet it might be a warning from the OECD that may actually have more influence on the oil trade today.
Having momentarily surpassed the $50 oer barrel hurdle, Brent and WTI suffered from profit-taking in the second half of Thursday’s session before extending their losses slightly on Friday morning. Despite the pullback, both oil contracts still looked set to close higher for the third straight week.