A February Freeze

By: Lindsay Farrell / February 16, 2016

Russia, Saudi Arabia, Venezuela and Qatar have agreed to freeze production levels at January levels provided that others, mainly Iran, agree to do the same.  Although freezing production is certainly better than an increase, it still isn’t a production cut.  Further, you can see from Bloomberg's graph below that some countries, specifically Saudi Arabia, were at an increased level in January over December – making the freeze at the higher output.  The news has the market pulling back from Friday's gains.  

2016.02.16.png

The freeze discussion came after Iran’s first export to Europe in over 3 years occurred on Monday. Monday’s tanker was carrying over 2 million barrels.  It is followed by another carrying 1 million barrels scheduled for next Tuesday.  According to an OPEC delegate this “changed everything.”  The European market was previously supplied by Saudi Arabia and Russia, but Iran has lowered its prices to compete and earn back its market share. The Iranian oil has impacted already-struggling crude prices, which have dropped more than 70% since their summer of 2014 peak of $114/bbl. 

As a reminder, due to the holiday the API and DOE stats are delayed a day and the settles remain the same as friday.  


Categories: Daily Market Update


Lindsay Farrell

Written by

Lindsay Farrell

As Manager of Quality Assurance and Regulatory Compliance, Lindsay Farrell is responsible for fuel operability across the company’s terminals and customer sites, as well as keeping up-to-date with the latest regulations and best practices within the industry.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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