OPEC delegates say comments from top exporter Saudi Arabia, which two years ago led the group to drop its historic role of supporting crude prices, are a change in tone and a sign the kingdom is looking - verbally for now - to prop up the market.
The Energy Information Administration, OPEC and the International Energy Agency all see the crude oil market getting in balance, but the timing and the point at which we flip to a global supply deficit is up for debate.
For years, this country bemoaned being dependent on Middle Eastern crude oil. We learned of the real risk to our national security after the Arab Oil Embargo and swore that someday we would free ourselves from the slave like binds of dependency on Middle Eastern oil. We vowed energy independence, even as many thought that was an unrealistic pipe dream.
Crude oil prices are falling even as the fundamentals start to get tighter, and turmoil surrounding the Brexit vote is perhaps once again going to undo the green shoots of recovery. Even as both OPEC and the International Energy Agency (IEA) talk about a tighter oil market, fear of the fallout from a UK exit from the Eurozone is throwing global markets into a tizzy.
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.