Just before Thursday’s OPEC meeting in Vienna we can see more and more news regarding oil market. In recent weeks we observed a rebound in oil prices on the extension of a production cut.
Latest retracement in oil prices is mainly because of comments made by Oman officials, regarding the extension of a production cut. Selim Aloufi, oil and gas undersectretary, sees no need for deeper OPEC cut and wants discussion before backing 9 month plan. Oman is seen as a one of the more skeptical OPEC member. However, Saudis should quickly convince Oman to their point of view, as it was in case of Iraq, making current decline in oil price just a correction.
OPEC meeting will be held in next Thursday, May 25 in Vienna. Here is a schedule provided by Iranian oil ministry website:
- 10:00am OPEC meeting opnes
- 3:00pm OPEC, non-OPEC meeting opnes
- 5:00pm Press conference with Barkindo and Novak
Today White House said that sale of strategic oil reserves could be done without hurting producers. Proposed budget requests to sell approximately 270 million barrels of crude over 10 years. Releasing around 74.000 barrels a day represents about 0.00077 percent of global production. In other words, it should not have any significant meaning to the oil prices.
WTI price, on OPEC proposed extension cut, bounced from $43.78 in the start of May now trading around $51.34 level. In the coming days we expect an increased volatility in the energy sector.
WTI after rebound in the beginning of a month, rallied now trading around $51.34 level. At the range between $52.55-$53.81 more selling pressure is expected.