With Friday drawing closer, there are discussions of what OPEC plans to bring to the table when it meets in Vienna, Austria. Will there be a cut in production, an increase or no change? Although there are many opinions, there are speculations of an expected continuation of the current policy. U.S. drilling crews are not returning after Thanksgiving, and IEA data showed U.S. production falling in September by 20k bpd, marking a third consecutive month of declining production. Amidst that data, Venezuela, Angola, Nigeria and Iran claim that they will ramp up their own output by an estimated 500k bpd on completion of a nuclear deal with P5+1. (P5+1 is a diplomatic group created in 2006 in regards to Iran’s nuclear program) This is leading the Saudis to give input on their willingness to cut output. Overall, unless a decision not to cut is accompanied by some future production changes, the market seems to be gliding into the new year remaining on the downward trend and might test the lows of 2015.
As we wait for the OPEC decision, unless there is global news or other production information, market moves could be limited until the decision. This morning brought a slight surge in prices for both diesel and gasoline. Gas began to jump very early this morning, and as of noon E.T. it is up $.0650. Diesel was up nearly $.0400 around 10:00 A.M. E.T., but has fallen back to only $.0150 as of noon E.T.
- Iraqi crude oil exports surge to record high of 3.365 mbpd in November.
- As mentioned previously, U.S. crude oil output slips for third straight month in September to 9.326 mbpd.
- China’s official Purchasing Managers Index for September was a 3 year low of 49.6. A number below 50 indicates a contracting economy.