Crude oil price trends a consecutive 3-day high starting last Tuesday, before settling down its brim early Friday trading. Traders are still on the look for the varying effects of the OPEC members’ decision to cut their ongoing production while mitigating from its growth earlier this Friday due to rising oil stockpiles in American storage facilities offset.
Intraday resistance for the past 3 days was at $54.40, but even with the tremendous streak, the prices are still below the yearly high standard which is currently at $55.67. According to the Russian Energy Ministry, as of Thursday, the country’s oil production and condensate have decreased by 100,000 barrels a day contrary to last December’s. National Australia Bank’s analysts said that “There is anecdotal evidence to suggest that the
Crude oil opens Friday inches lower after rising oil stockpiles in American Storage, prices are quickly apprehended on decreasing as traders ignored the building tension between the United States and Iran. On the other hand, Brent and WTI traded their highest levels since early 2017. A signal that producers from the OPEC countries and other exporters are staying true with the global agreement on output cut.
U.S. Crude Oil Expectations
The Energy Information Administration revealed U.S. oil production is significantly higher. EIA also reported that U.S. crude oil production will continue to grow to hit an average of 9.3 million barrels produced every day by the year 2018 from the 8.9 million barrels a day last 2016. Several oil market players are also skeptical about the current U.S. administration headed by President Donald Trump’s take on energy policies as well as his relationship with Iran. While a Singapore-based fuel trader noted that “For now, most people are expecting the tension between the U.S. and Iran to be mainly verbal but it is hard to predict what Trump would do next. His main interest is to enlarge U.S. market shares,”
OPEC to Release January Production Mid-February
OPEC will be looking to release its January production somewhere around the middle of February, and another scheduled meeting in June is anticipated. The meeting will be circled around the assessment of the effects of the pact and the cartel, and whether or not the deal would continue for few more months. If the deal would proceed to its full implementation, it could spell a 900,000 barrel a day reduction in the market by the third quarter, noted by Citi Futures analyst Tim Evans. He also mentioned that the initial conclusion with the production limits being extended can’t be taken for granted.
Crude oil is still expected to close on a positive note this Friday, continuing its bullish streak. Although its future grows bleaker due to the uncertainty the new U.S. administration beholds, and the looming possibility of OPEC countries and other participating countries breaking the production cut deal.
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