OPEC and Non-OPEC sources announced that they have agreed to extend production cut until the end of 2018, but will review the situation in June to make sure that the cuts are not causing larger problems for the Cartel.
Despite a record-high close on the S&P 500 last Friday, Asian equities edged lower, led by Korean markets. Chinese stocks continued to decline after having the biggest one-day selloff in 17 months on Thursday, as rising government and corporate bond yields signaled tighter liquidity conditions.
Crude oil prices are getting geared up for the OPEC/Non-OPEC meeting in Vienna, Austria. At this meeting it is widely expected that the players involved will extend cuts throughout the rest of next year, despite some lingering geo-political and shale oil concerns. This meeting comes as oil prices pull back from a two-and-a-half-year high and global supply is tightening.
Business and users of crude oil that did not buy into the lower for longer talk are giving thanks this Thanksgiving for having hedged their oil, gasoline and diesel purchases. Suddenly, the oil glut that many had predicted would last forever has suddenly turned into a very tight market.
After being extremely overbought with a record amount of hedge fund and large speculators long caused a sell-off after a questionable report from the International Energy Agency’s, Traders hoping that the American Petroleum Institute weekly supply report would perhaps add some clarity only added to the confusion. In a major mixed bag of a report, the API reported massive and unexpected 6.513 million barrels increase in weekly supply.