The dollar is weakening this morning, which is putting slight upward pressure on oil prices at the moment. According to Tamas Varga, senior analyst at PVM Oil Associates, "The market is range bound, therefore there is nothing surprising in seeing fresh buying after a big sell-off and of course the slightly weaker dollar is also helping oil recover."
Why did we see such a big sell-off yesterday? The answer can be given in one word, “Russia.” Sure, we hear about Russia in the news in regards to President Trump, but what most people probably don’t realize is that Russia caused a ruckus in the world of oil yesterday. There have been concerns for a while now that Russia would not cut production by the amount that it promised. Well, those concerns came to fruition yesterday, when it was announced that Russia is currently not on pace with its production cuts. So, just how bad is Russia doing in regards to its cuts?
Russia is only cutting production levels by around 33% of what it promised to cut. The question at hand, is, how this will affect the market moving forward? Will others start to decrease production cuts in order to protect market share or will OPEC/non-OPEC members stay consistent with current production levels?
One person that could influence market movement in the coming weeks is Janet Yellen, Chair of the Federal Reserve. She is scheduled to speak today on the topic of interest rates. No definitive decisions are expected to be made, but her speech is expected to hint at what might happen in the coming weeks.
As of 9:47 am, Heating Oil is trading up nearly half a cent, RBOB is up around 1 cent and WTI crude is up 25 cents.