Saudi Arabia and Iran don’t agree on much, but they do share one common goal, “protect market share.” Headlines today are focusing on Iran and Saudi Arabia, in regards to whether they will cap production or not. So far, each nation appears to be staying consistent with their message.
The familiar message they bring to us, is that they will consider capping production at certain levels, if and only if other major players agree to do the same. To sum it up, Iran and the Saudi’s feel that nothing with real substance can happen until the next OPEC meeting in November.
While we all wait for the OPEC meeting, it’s possible that the market may fall victim to embedding. For those of you who may have skipped your vocabulary class in school, embedding is the tendency to latch onto the first bit of information presented.
For the time being, it seems unlikely that any real action will be taken on a mass-production freeze until the OPEC meeting in Vienna, if at all.
All we can do is wait for the statistics to come out to see which way things are headed next. A.P.I. data comes out this evening followed by D.O.E.'s tomorrow. The expectation is for crude to build and refined products to draw, following the recent Colonial Pipeline outage.
As of 12:20 PM
- NYMEX is down approximately 5 cents on Heating Oil and 3 cents on RBOB.
- WTI Crude is falling towards $44 per barrel.