By November 20, 2017 Read More →

Oil prices ease as traders, analysts on edge prior to OPEC meeting

oil prices 

Oil prices have fallen from two-year highs since the beginning of November. Apache Canada photo.

Rising US dollar also impacts oil prices

Oil prices dipped on Monday on traders’ and analysts’ concerns over the possible extension of the OPEC supply cut as well as a rising US dollar.

By 2:06 p.m. EST, Brent crude prices had fallen 74 cents to $61.98/barrel and US WTI was down 60 cents to $56.171/barrel. The Canadian Crude Index sat at $40.16.

Since early November, US crude is down over 2 per cent.

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At the end of November, OPEC members along with a group of non-cartel producers, including Russia will meet to discuss extending the OPEC supply cut agreement, set to expire in March 2018.

Most expect the pact, which is seen as a major factor in the oil market rebalance to date, to be prolonged until the end of 2018.

“It is widely believed that OPEC together with 10 non-OPEC countries will roll over their production for the whole of 2018, although Russia is holding its cards close to its chest,” PVM Oil Associates strategist Tamas Varga told Reuters.

Overnight, the US dollar rose 0.4 per cent against the euro on political uncertainty in the European Union after Angela Merkel was unable to form a coalition government in Germany.

A rising dollar makes oil more expensive for global buyers using other currencies.

As well, high levels of speculative interest in crude may have impacted oil prices.  Data from the Commodity Futures Trading Commission showed a record level of long positions in RBOB gasoline futures as well.

“Because of those positions, we were vulnerable to profit taking, and people started to get out when the dollar took off,” Phil Flynn, analyst at Price Futures Group told Reuters.


Posted in: Energy Financial

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