The oil can be stabilized before the decision of OPEC
On Thursday, Brent continued to rush in range, not finding a place with the excitement growing the closer “day X”, when OPEC and its allies will make their verdict on the question of increasing production. This is the main theme around which concentrated speculation in the past month and, of course, a key factor of uncertainty in the commodity segment.
The oil Minister of Saudi Arabia Khalid al-falih said yesterday that a gradual increase in OPEC production+ is inevitable. In other words, the question is considered solved, especially that the two leaders of the agreement, Saudi Arabia and Russia in advance began to prepare the markets to the easing of quotas, citing the success achieved and the risk of supply shortage due to the crisis in Venezuela and sanctions against Iran.
It seems now the only question is how to increase production of hydrocarbons. As the main considering an option of correction commitments to reduce output by 1.5 million barrels per day from the current 1.8 million negative for The bulls at the Brent scenario would be a weakening of the quota from 1 million barrels, however, this option is unlikely, especially given that some exporters can and do oppose the changes to the terms of the agreement out of fear of a collapse of quotations.
In the short term, Brent will continue to fight for the level of 76, but bearish risks still prevail, since in conditions of uncertainty, players can continue the profit-taking before the onset of the weekend, especially because today’s Baker Hughes data can once again reflect the increasing drilling activity in the United States.
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