Oil Prices - Jan 26
Posted: Tue Jan 26, 2016 4:07 pm
Today's move in crude, which closed up 3.7% to just over $31 per barrel, came after a report said that OPEC was ready to "cooperate" to stabilize the oil market. That report was based on comments from Kuwait's OPEC governor, Nawal al-Fuzaia, who said: "OPEC is willing to cooperate with producers outside the group if they show they are serious about cooperating with OPEC. Non-OPEC producers keep on making statements that they are willing to cooperate, but the reality is different."
It is, however, worth noting that these comments aren't anything the organization hasn't said before. In fact, the only difference this time is comments by non-OPEC member Oman, which recently said it would cut its production by up to 10% if OPEC and other non-producers joined it. Still, Oman isn't enough; OPEC likely needs a resistant Russia to join the efforts before it would consider cutting.
These are just short covering rallies. There are few committed buyers.
A steady move up will require confirmation that Non-OPEC production is declining. We should see that in Q2.
It is, however, worth noting that these comments aren't anything the organization hasn't said before. In fact, the only difference this time is comments by non-OPEC member Oman, which recently said it would cut its production by up to 10% if OPEC and other non-producers joined it. Still, Oman isn't enough; OPEC likely needs a resistant Russia to join the efforts before it would consider cutting.
These are just short covering rallies. There are few committed buyers.
A steady move up will require confirmation that Non-OPEC production is declining. We should see that in Q2.