for Oil Prices
Stay on top of the latest developments in oil markets, geopolitical risk, and alternative fuel vehicles with the SAFE policy team's Chart of the Week.
If fundamentals weaken and oil market sentiment shifts, a sharp price correction is likely once investors liquidate their long positions.
While U.S. crude production hasn’t fully recovered, it has increased by more than 300,000 b/d since September to average just under 9 million barrels per day. As a result, the OPEC-fueled boom in prices has stalled for the time being.
The group has been adamant about putting together a united front to show that it will follow through with production cuts and counter critics who doubt its willingness or capability to do so.
The OPEC commission would examine whether the cartel’s behavior is designed to disadvantage U.S. oil producers and secure market power through anti-competitive behavior.
There are already signs that OPEC is committed to following through with pledges, even if indicators are contradictory and vague at the moment. The oil market has stabilized in the low-to-mid $50s, indicating the group has indeed put a floor under prices for the time being.
OPEC has certainly put a floor under the market, but it’s not yet clear how high members can push prices. Oil may simply trade in a range of $45-$60, with shale capping prices on the upside and the cartel's production cuts limiting the downside.
The past two years have reminded many observers that black gold is tough to beat, no matter what commitments countries make, and that countries like China still have a lot of room to grow.
Video: Saudi Arabian Energy Minister Khalid al-Falih’s Full Comments Before OPEC Ministerial Meeting
Saudi Arabian Energy Minister Khalid al-Falih comments on his expectations for an OPEC deal, cooperation from non-OPEC members, and timelines for market rebalancing.
Oil markets and analysts have been skeptical that a deal would emerge from this week’s OPEC meeting, following stonewalling from ministers and signals of willingness to walk away without a deal from Saudi Arabia. But cartel members struck an optimistic tone that a deal will be achieved today in Vienna, sending oil prices up by 6 percent.