Crude prices could plunge toward $30 a barrel, bank warns
Feb 22 2017
'Crude oil output increased the most in Iraq, Angola and Libya, whiles production in Saudi Arabia, Nigeria and Venezuela showed the largest decline, " OPEC said. The IEA admits that U.S., Canada, and Brazil (none of which has agreed to cuts) could increase their output by 750,000 bpd in 2017. Transactions on Monday will be booked Tuesday for settlement purposes because of the U.S. Presidents' Day holiday. The IEA notes that the output cut "is certainly one of the deepest in the history of OPEC". He stressed the need for these cuts being implemented considering how high level of oil stockpiles continued to weigh on the market.
Brent futures climbed 1.6% to $57.06 per barrel.
A rally in the energy sector pushed the rest of the markets higher with the S&P 500 rising 0.60% to 2,365, a new record, and the Nasdaq climbing 0.47% to 5,865, also a fresh high.
My colleague Kim Cramer Larsson highlighted in this update earlier how WTI crude oil is attempting to break out of the narrowing range we have witnessed during the past couple of months.
Heavy crude is typically more dense and viscous than other oil grades.
Oil production in Iran will reach four million barrels per day (bpd) by the beginning of the next Iranian calendar year (March 21) National Iranian Oil Company Managing Director Ali Kardor said on Saturday.
OPEC's Secretary-General Mohammad Barkindo has welcomed the ramp-up in USA shale output, rebuffing speculation that the surge is sabotaging the cartel's closely watched agreement to cut oil production.
He said it was too early to say if the supply cut, which lasts for six months from January 1, would need to be extended or deepened at the next OPEC meeting in May.
Investors have certainly taken Opec members at their word on their commitment to cut production, and now hold more United States crude futures and options than at any time on record.
On February 10, the International Energy Agency (IEA) reported that OPEC is seeing record compliance on the agreement to reduce oil output among member nations.
Upon this comment from OPEC seeking higher compliance, we got a few institutions raising their Crude Oil Forecasts with Citi raising their forecast by $55/barrel.
Analysts said oil price dynamics would continue to remain uncertain and volatile.
Barkindo said the deal prompted the 11 non-OPEC countries participating to "waive some of their sovereign incumbencies to monitor or police, if you like, the implementation of the joint agreement".