OPEC members were unable to reach an agreement on output quotas at their meeting on October 28-29. Oil prices declined by 2 USD/barrel over the past week.
Among the news items that caught our attention:
• Last Wednesday, crude oil inventory data from the U.S. Energy Information Administration surprised markets, showing an increase of 14,420,000 barrels rather than the expected rise of only 1,581,000 barrels.
• According to Adam Sieminski, administrator of the U.S. Energy Information Administration, U.S. crude oil output will decline by 800,000 barrels a day next year. This may have a positive effect on crude oil prices.
• The next OPEC meeting will take place on November 30, 2016. According to Citigroup (NYSE:C), OPEC member nations and Russia will most likely reach an agreement to implement production quotas.
• Last Sunday, an earthquake of magnitude five struck near one of the biggest oil hubs in the US located in Oklahoma. This event forced certain companies to close their pipelines as a preventative measure. As we await the outcome of the U.S. elections, we recommend that our clients place orders for their fuel hedges in CAD/L.
