Oil prices are down this morning, adding to this week’s decline, as they look for some firm direction moving forward. Earlier in the week, the American Petroleum Institute and Energy Information Administration released their bearish stats (detailed in this blog earlier), which helped to move the market to potentially its largest weekly decline in a month as the Fed Chairwoman made remarks this morning at the central bank’s annual summit in Jackson Hole, Wyoming. With Chairwoman Yellen hinting at a stronger chance of an interest rate increase this year, the dollar initially declined, but has now moved positive, pushing the oil market lower across both refined product indexes as of this writing.
Currently, another major “unknown” remains as Saudi Arabia and Iran continue to posture for the upcoming informal OPEC meeting set for next month in Algeria. While there have been mixed signals and comments this week regarding production intervention, common sentiment seems to be leaning towards continuing on the same path of defending market share. As the Saudi Arabian Energy Minister stated to Reuters, “We don’t believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us.” Further supporting the “stay the course” objective was Iran’s Oil Minister, stating “Revival of Iran’s lost share in the oil market is the national demand of the Iranian nation.”
Additional news that can impact market news over the next few days is the current weather system named Invest 99 which is developing and heading for the Gulf Coast. Traders will be watching closely for any refinery related issues in that area. Also, a sparring match between the U.S. and Iran earlier in the week near the Strait of Hormuz had a Chicago based analyst commenting that “These reports of confrontation between the U.S. and Iranian vessels are giving cause again for oil markets to think about geopolitical tensions in the Middle East and what potential disruptions those could cause to oil traffic there.”