Support of the OPEC is weakening

Posted 13 February, 2017

OPEC supporters are losing their patience. After numerous advances in connection with the OPEC agreement, which had to solve the problem of global oil oversupply on the market, asset managers have begun to reduce their positions on the WTI growth. Meanwhile, countries of the cartel and other major producers are reducing production volumes. However, American reserves and production are rising and shale producers launch new drilling rigs. Last two months, the North American benchmark WTI was trading in the range of $50-$55 per barrel.


OPEC, as promised, has demonstrated its determination in respect of agreement on production reduction. It is well known that in past the cartel reluctantly performed its duties, in order not to lose market share and high income. This was confirmed by the former Minister of Energy of Saudi Arabia Ali al-Naimi. In addition, the US producers last week increased the number of active drilling rigs up to its maximum levels for the last 4 years.


According to EIA, oil production in the US rose to 8.98 million barrels a day over the last week. EIA also expects that next year production will reach 9.53 million barrels per day. Hedge funds from 1 to 7 February have reduced the number of long positions by 5.4%, according to Commodity Futures Trading Commission.

Previous story

13 February, 2017 16:00

← Rockefeller Treasury Services, Inc. Analytics | 13 of February

On the data front, the biggie this week is US inflation, which Bloomberg projects at a whopping 2.4% (from below 0.5% percent in Sept 2015). CPI is not what the Fed watches but a data point like that will roil markets. The CPI report is on Wednesday, the first day of Fed chair Yellen testimony (to the Senate finance committee).

Rockefeller Treasury Services, Inc. Analytics | 13 of February

Next story

10 February, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 10 of February →

Trump is still dominating the headlines. This time market players are relieved that it’s a promise of tax reform that is egging on the reflation trade, and not something negative for the economy and markets.

Rockefeller Treasury Services, Inc. Analytics | 10 of February
Write a comment
 
Prove you’re not a bot + 10 = 25