OPEC’s 14 oil producing nations agreed to modestly cut their collective oil output later this year in an effort to bolster sagging prices, according to a cartel official. The decision sent global oil prices soaring by more than 5 percent. See Link
Since then, we have seen concerns / contradicting developments relating to the planned deal:
Igor Sechin, Russia’s most influential oil executive and the head of state-controlled energy giant Rosneft, said his company will not cap oil production as part of a possible agreement with OPEC. See Link
Libya, Iran and Nigeria have said they aim to pump additional volumes that could total 700,000 barrels of oil a day over August levels. See Link
Details over who will bear the brunt of the cuts are due to be set by end-November but there is already growing wariness among market-watchers about how the deal can be implemented. See Link
Low probability of a deal cut. See Link
Technically, strong resistance is expected for Brent Crude to cross above the $53.0 mark
In spite of a rebound in the brent crude oil price, we continue to see on-going trimming of selected equity holdings in oil and gas counters by Malaysia’s pension fund, EPF in the month of October 2016:
How far can Brent go up? It will ultimately depend on the viability of shale producers (average cost at USD62):
Until there are further concrete plans relating to the production cut, oversupply of crude will continue to persist.
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