As we settle into our summer routines of BBQ’s and pool parties, we find trading volumes and energy headlines light and sparse. One headline that appears to have goosed the market off its lows this morning underscores the idea for oil producers to look for ways to cap rising production. Ministers from OPEC and non-OPEC nations will meet in the port city of St. Petersburg, Russia later this month to discuss the current situation in the oil market. Within the next two weeks there will be conversations with Libyan and Nigerian officials to potentially invite them to the technical summit as well. OPEC delegates have stated bringing Nigeria or Libya into the production pact would focus on capping their output as opposed to asking them to cut their supply. As of 11:15 am EST, WTI is up $0.42 at $44.67 having bounced off its intraday low of $43.65. For now, WTI is stuck in-between a lower channel of $41.79 and an upper channel of $50.68.
RBOB is up $0.0114 at $1.5098 and Heating Oil is up $0.0136 at $1.4677. Only time will tell if today’s friendly headline prevails or will shale producers, having benefited from a combination of cost reductions and improvements in drilling efficiency and well productivity, continue to keep a lid on any rally. For now, we shall embrace the “dog days of summer” with lighter trading volumes and the headline “tug of war” between bullish global production cuts and bearish U.S. production increase.