The rate of oil relies on OPEC
The rapid decline of oil has been suspended after the leader of OPEC, Saudi Arabia has held telephone talks with other oil producers for further production cuts.
The possible introduction of 10% of the tariffs on Chinese goods from the United States influenced the global stock and commodity platforms. At the moment there is no clear certainty, will China take measures to settle trade dispute or should we wait for him rigidity that will provoke the escalation of the conflict for a long period.
OPEC took a big risk when he took the decision to maintain quotas on oil production unchanged at 1.2 million barrels per day. In order to protect the global oil market from unexpected turns in trade disputes, it was necessary to increase the reduction of production to 1.8 million barrels.
Ministerial meeting of OPEC is scheduled for 12 February in Abu Dhabi. In the UAE capital they will have to discuss further steps to stabilize world oil prices. Given that the budget of Saudi Arabia is formed when the price of oil from $65 per barrel in the current situation long endure low prices unreasonable.
Despite the loud statements of the OPEC countries to reduce oil production, the market has not reacted to this news. Primarily, this is due to the fact that the participants in the commodity marketplaces don’t see strategies that will have a positive effect. The oil market entropy has a psychological pressure on many large investors who are trying to be out of the market and closely monitor the geopolitical situation.
While it is not necessary to expect serious improvement on the global oil market, the price of black gold will be under pressure. Brent will trade in the range of $56,68 to $58,00 per barrel, and WTI could move to $53,00.
“International financial center”