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Oil Price Fundamental Daily Forecast – OPEC Could Extend Production Cut Deal into End of Next Year

By:
James Hyerczyk
Published: Sep 22, 2017, 05:26 UTC

U.S. West Texas Intermediate and international-benchmark Brent crude oil closed mixed on Thursday with Brent posting a slight gain. Traders were bracing

OPEC Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil closed mixed on Thursday with Brent posting a slight gain. Traders were bracing for Friday’s meeting of OPEC and non-OPEC producers that could extend production limits or deepen the cuts designed to trim the supply glut and stabilize prices.

November WTI crude oil settled at $50.55, down $0.14 or -0.28% and December Brent crude oil finished at $56.09, up $0.16 or +0.29%.

West Texas Intermediate Crude Oil
Daily November West Texas Intermediate Crude Oil

Ministers from OPEC, Russia and other producing countries meet in Vienna on Friday and are due to consider extending output cuts that began in January.

Kuwaiti Oil Minister Essam al-Marzouq said on Thursday that compliance with OPEC-led oil output cuts was “very good” and above 100 percent. This supports the notion that OPEC will extend the deal, possibly to the end of next year.

Brent Crude
Daily December Brent Crude

Forecast

November WTI crude oil futures are trading higher early Friday and above the key level at $50.30 that has acted like a pivot all week. This is helping to give the market a strong upside bias. It also means that investors are banking on a positive development from the OPEC meeting.

Traders seem to be expecting OPEC to extend the deal, possibly to the end of next year. This should be enough to underpin the market and possibly extend the rally. Bringing currently exempt OPEC members Libya and Nigeria into the production deal should push the market over the top.

Limiting gains could be reports of increasing U.S. production. According to the latest data, U.S. oil production has reached 9.51 million bpd, up from 8.78 million bpd immediately after Hurricane Harvey hit the Texas Gulf Coast.

In other news, traders will also get the opportunity to react to the latest oil rig report for the week-ending September 22.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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