- WTI crude oil settled -1.4% at $58.11/bbl, snapping a four session winning streak, as some traders expressed doubt over an extension to the production cut agreement at the OPEC meeting later this week.
- Many observers expect the meeting will produce an extension, but “OPEC and Russia may not reach a conclusion on whether to extend supply cuts beyond March’s deadline until February,” says Adrienne Murphy, chief market analyst at AvaTrade, as OPEC wants to collect as much data possible and appease a reluctant Russia before it commits to more cuts.
- Barclays (LON:BARC) analysts warn that investors may be focusing on the wrong issue; it expects a six- or nine-month extension of the deal to be agreed to on Nov. 30, "but the extension length is less important than the quota level... and we assign a low likelihood to this detail being announced on Nov. 30."
- Also, despite Russia's stated readiness to support a supply cut extension, there are signs that Russia may find it hard to comply; Reuters reports output from its Sakhalin-1 project is set to rise by ~25% to 250K-260K bbl/day from January.
- ETFs: USO, XLE, OIL, UWT, UCO, VDE, DWT, ERX, XOP, SCO, OIH, BNO, DBO, ERY, DIG, DTO, BGR, USL, FENY, DUG, IYE, GUSH, IEO, DRIP, FIF, DNO, PXE, NDP, OLO, RYE, SZO, PXJ, FXN, OLEM, CRAK, DDG, NANR, OILK, WTIU, OILX, WTID, USOI, JHME, ERYY, FTXN, ERGF
- Now read: Why OPEC Will Extend 'Production Cuts' To The End Of 2018 At The End Of November
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