On Friday, the price of oil has surged significantly, extending overnight gains after Saudi Arabia announced its plans to coordinate with other major oil producers to stabilize prices.
The recent comment of the world’s biggest oil producer has been interpreted by most market participants as a move to limit the production of oil.
By 06:45 GMT, Brent crude futures were valued at $46.12 a barrel, receding from a three-week high of $46.66 posted in the day, though still 8 cents higher from its previous close.
U.S. West Texas Intermediate (WTI) crude was up 21 cents and is currently trading at $43.70 per barrel.
According to a recent update, Saudi Arabia and Russia, two of the world’s largest oil producers, has agreed to make a move to counter a slump that has severely hit economies, markets and companies. The oil producers would talk about a potential action to stabilize oil prices in a meeting in Algeria next month.
“Talk of production cuts in the oil markets saw prices surge overnight,” said ANZ bank on Friday.
The oil prices surged more than 4 percent on Thursday in response to the Saudi Arabia’s minister’s comments, which were interpreted as a positive development in a market suffering from an oversupply.
“Oil traders were spurred into action by the comments” a market strategist said.
Oil prices have been moving in a tight range recently as most market players and analysts were divided on what major producers, especially those who are members of the Organization of the Petroleum Exporting Countries (OPEC), would do to re-stabilize the oil market.
OPEC has announced earlier this week that its members will meet on the sidelines of an energy conference in Algeria next month, from Sept. 26-28, after the cartel failed to reach an agreement at a meeting earlier this year.
“Markets remain highly skeptical over the potential for coordinated action to balance oil markets, with the failure to reach an output freeze deal earlier this year still fresh in the mind. Nevertheless, the knee-jerk reaction that followed sent crude prices rallying,” said PVM in a note.
Saudi Arabia, the world’s number 1 oil producer, is pumping insane amounts of oil – 10.67 million barrels per day in July – causing some market players to question the kingdom’s sincerity.
To be updated with the most recent happenings in the financial markets, visit www.trade12.com and www.options12.com. Exo Capital Markets Ltd aims to deliver the highest quality of services to its clients, so be sure to check the website. Trade12 and Options12 are brands owned by Exo Capital Markets.
No comments:
Post a Comment