- Oil prices settled sharply lower, with Brent crude ending at a six-week low, as Saudi Arabia and Russia appear ready to raise production at next week's OPEC meeting in Vienna.
- August Brent settled -3.3% to $73.44/bbl, the lowest settlement since May 2 and capping a ~4% loss for the week, while July WTI finished -2.7% at $65.06/bbl, its lowest finish since June 6 as it lost 1% for the week.
- Saudi Arabia is considering a production hike of 500K-1M bbl/day while Russia is looking at an increase of as much as 1.5M bbl/day, although the “vast majority” of OPEC producers are arguing against relaxing production curbs that have been in place for 18 months, says Helima Croft, head of commodity strategy at RBC Capital.
- As a result, Croft thinks Saudi Arabia and the OPEC leadership likely will deliver a modest 500K bbl/day rise while signaling readiness to quickly fill serious supply gaps if needed; however, next week's meeting could prove so contentious that Saudi Arabia and Russia are left to act on their own.
- In the stock market, energy companies are taking a beating: XOM -1.4%, CVX -2%, CHK -2.2%, BP -2.8%, EOG -2.9%, APA -3%, RDS.A -3.1%, DVN -3.6%, APC -3.7%, PXD -3.8%, COP -4.2%, CLR -5.5%, MRO -5.6%, NBR -8%, WLL -9.5%.
- ETFs: USO, XLE, OIL, UWT, UCO, VDE, XOP, DWT, ERX, OIH, SCO, BNO, DBO, ERY, DIG, BGR, GUSH, DTO, FENY, USL, IYE, DUG, DRIP, IEO, FIF, DNO, NDP, PXE, OLO, RYE, PXJ, SZO, CRAK, FXN, OLEM, WTIU, DDG, OILK, NANR, OILX, WTID, USOI, USOU, USOD, FTXN, JHME, UBRT, ERYY, DBRT, ERGF, OILD, OILU, USAI
- Now read: Pioneer Natural Resources: Increased Focus On Permian
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