OPEC Agree to disagree! September 26/28 (informal) meeting
While the weekly inventory report keeps oil prices volatile, traders remain focused on the upcoming informal meeting of OPEC members on September 26 – 28 on the sidelines of the oil forum meeting in Algeria. Despite some optimism, the widely accepted fact remains that with Saudi Arabia ramping up production, citing ‘summer demand’ and Iran unwilling to budge, the September Algeria meeting is likely to be a repeat of the Doha talks earlier this year. Olivier Jakob of PetroMatrix in Switzerland said, “There is currently a race to print any freeze headlines, but we have not yet seen strong substance behind them.”
Will oil prices fall back to $40 a barrel?
John Kilduff from Again Capital thinks so. In an interview with CNBC’s ‘Squawk Box,’ Kilduff said “I think we’re going to go back down to at least $40 and possibly the mid $30s” Kilduff said that despite some on-off hawkish comments from Saudi Arabia, the wider argument remains that with individual oil producers ramping up production, there is nothing to substantiate the hawkish narrative. Joining Kilduff are many other mainstream analysts who expect oil prices to fall between autumn and spring. Tom Kloza, from OPIS, said, “even if crude supply moves unmistakably into balance, markets will still have to work through record stocks of refined products, particularly gasoline.” Fadel Gheit, a senior energy analyst at Oppenheimer & Co., said, “We have to recognize that oil prices are likely to remain lower for longer than expected.”
Read more: https://www.orbex.com/blog/2016/08/oil-slips-eia-shows-build-us-crude-oil-inventory/