This Friday, oil futures leveled higher. Recovering from the previous 5% drop which was the consequence of higher market expectations related to OPEC. Currently, traders are trying to refresh their attitude about Oil market and OPEC’s further steps.
The U.S. West Texas Intermediate crude July contract came on 90 cents. In percentage, that would be around 1.9%. Later it ended at $49.80 a barrel by close of trade Friday. It touched a two-week low of $48.18 earlier in the session.
U.S. benchmark cut the losses to fewer than 2%. Observing the first 4 days of the week it was slightly oscillating, then it plummeted for 4.8% on Thursday.
Following, on the ICE Futures Exchange in London, Brent oil for July delivery added 69 cents to settle at $52.15 a barrel by close of trade. Before that it was hitting a daily trough of $50.71. This level was not seen since May 12.
OPEC and non-OPEC countries decided on Thursday, in Vienna, to prolong the output cuts. Numbers are the same, million barrels per day until the end of the first quarter of 2018.
The agreement was globally accepted. But some of the market participants were still expecting the deeper cuts. In order for global market re-balance to be achieved sooner.
Next OPEC meeting
The next OPEC meeting is scheduled for November this year.
By now, the further production cuts did not have important impact on global inventory levels. Because the countries who are not participating in these output cuts are drilling bigger amounts of their oil. Such as Nigeria, Libya. And of course, the huge U.S. shale outputs.
Baker Hughes on Friday came out with data about U.S. shale drillers. They added rigs for 19th week in a row.
The U.S. rig count rose to the highest levels since April 2015. Declaring that further production gains in their production are ahead.
In order to bring financial markets closer to stability, the deal between OPEC countries and U.S. would be necessary. The constant amounts of Crude oil which are coming from the U.S. shale can only disturb every OPEC’s idea connected with market re-balance.
That definitely won’t be achieved easily, but if achieved would be of a huge value for the global markets.
In the following week, oil traders are going to face weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday. In order to track the real strength of demand in the United States.
Having in mind that Monday is a Memorial Day, the reports on these data will come out one day later than the usual.
Important Events to take place in the upcoming week:
Monday, May 29
Markets in the U.S. are closed for Memorial Day.
Wednesday, May 31
The American Petroleum Institute will publish the weekly report on U.S. oil supplies.
Thursday, June 1
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
The U.S. government is also set to produce a weekly report on natural gas supplies in storage.
Friday, June 2
Baker Hughes will release weekly data on the U.S. oil rig count.