Further supply cuts key to oil price

1 November, 2017

Further supply cuts key to oil price

Brent oil is now sitting comfortably above the $60, making its highest level in more than 2 years on the back of a deal between Russia and Saudi Arabia to extend production cuts past March next year.

Up until now, the deal to reduce output between Opec members has run smoothly with most countries sticking to their agreed output but come March, things could change and not all may be on board for an extension of cuts.

Countries such as Libya and Nigeria are looking like the countries that may opt out of the next deal as they feel they need to make up for lost time due to supply disruptions for various reasons

It will become clear to the market over the next month or so who is in or who is out and depending on how many countries refrain from extending production cuts, the oil price could be in for a sharp reversal.

Another thing to watch are drillers from the USA who are currently ramping up production to take advantage of higher prices and if history is anything to go by, this will eventually lead to an oversupply of oil in the market which will also pressure the price.

US shale producers claim they were still profitable when oil was around $40 a barrel so the margin for a pullback is quite significant

“We could rapidly go from a predicted deficit of around 260,000 barrels to a surplus of close to 1.5 million barrels. Prices would undoubtedly collapse,” said Matt Stanley, a fuel broker at Freight Investor Services.


Source link  
Gold looks to tax reforms

The gold price is slightly lower in today’s European trading session although it is still hovering around 1 month highs as fears grow that US President...

Gold set to go higher

The gold price has moved significantly higher over the last 4 trading sessions on the back of US president Donald Trump’s trip to Asia as well as political turmoil for the president back home...

Euro set to weaken further

The Euro is under further pressure today against its US counterpart after suffering heavy losses on Friday on the back of strong data from the US...


Gold awaits next Fed chair

The gold price is heading for a 2nd day of gains as the market awaits US president Donald Trump’s choice for the next candidate to run the US Federal...

Pound may tumble after rate decision

The British pound is trading higher again today against its US counterpart, following on from yesterday’s solid performance but some warn...

Will the BOE hike rates?

The British pound is under pressure in today’s trading after some analysts and a Bank of England board member threw into question


Double bottom may save gold

The gold price is under further pressure today as investors continue to pile into the US dollar on the back of proposed tax breaks by US president...

Oil to remain flat

The oil price is set to remain stagnant over the next few years according to some analysts with the outside possibility that the price could tumble if Opec members fail to cooperate...

Mini gold rally won't last

After hitting a low of $1,260 3 days ago, the gold price has rallied nearly $30 to be trading around $1,289 today and some are predicting...

  


Share: