Uncertainty about OPEC and US election leads to oil price drop
The price per barrel had dropped below $45 by Friday, Nov. 3, and hovers near that level, representing "the biggest weekly loss in almost 10 months," according to a Bloomberg report.
According to a Nov. 7 report on Reuters, oil prices have been "supported by easing concerns over the economy after news that U.S. presidential candidate Hillary Clinton will not face charges over her emails, but prices were pressured by a rallying dollar and doubts over OPEC's planned production cuts." OPEC met on Oct. 28 to hammer out details of an agreement that could cap output levels for member countries. Increased production by OPEC has been widely credited with depressed oil markets over the past two years.
A Nov. 4 Wall Street Journal article noted that while OPEC members have "agreed to use a unified set of independent production data for output cuts, lifting a key hurdle toward the implementation of a landmark output agreement," there are still major hurdles to an accord, including several countries that want to be excluded from production cuts.
Investing.com reported Monday that OPEC secretary-general Mohammed Barkindo said, "the cartel is committed to a planned cut in output to 32.5-33 million barrels per day to address a supply glut."
OPEC's inability to agree on a deal has had an impact on some of the world's richest men, according to a Nov. 7 Bloomberg report. "The world's richest oil billionaires had $4.6 billion wiped from their fortunes last week," the news agency reported. Oil producers Harold Hamm, Kelcy Warren and Jeffery Hilldebrand were among those who took a hit.
OPEC is scheduled to meet on Nov. 30 to finalize a deal. But skepticism remains. "While Goldman Sachs Group Inc. sees little probability of an agreement at a Nov. 30 meeting, Bank of America Merrill Lynch and Citigroup Inc. say an accord is likely," Bloomberg reported.
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1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
Source: The Energy Report (11/7/16)