Now it is time again: the oil market is turning its attention (almost undivided) to OPEC (organization of oil exporting countries). After the prices have been determined by the impact of the hurricanes on the oil infrastructure in the USA for a few weeks now, reports from this area have little influence at the moment.
The publication of the current stock data signaled clear signals this week. Even if the development of the data was not surprising – the crude oil inventories rose and the product inventories decreased – the fact was that the reported data was much stronger than expected. So the oil prices climbed up on Wednesday and have maintained this high level ever since.
At the moment, the uncertainty about the nuclear deal with Iran is having an effect. Through the currently unfortunate communication process, a failure of this agreement becomes more likely. This would have a significant impact on oil production in the country.
Particular attention is paid to the meeting of the JMMC (Joint OPEC Non-OPEC Ministerial Monitoring Committee), held today. This committee controls compliance with the implementation of the OPEC production agreement and some other large oil producers. Already on Wednesday they met in a small round and noted that the conversion rate in August was 116 percent. Based on this agenda, today’s meeting was taking place. Although it is already known that an extension or intensification of the agreement is not on the agenda, the market participants yesterday were cautious, waiting for indications with price-determining effects to the OPEC’s further strategy.
“Today’s meeting of the Joint Ministerial Monitoring Committee is lending buoyancy,” Commerzbank said in a note. “Although no binding promises to extend or expand the agreement can be expected, Nigeria – which like Libya had not signed up to the production cuts – is at least showing a willingness to come on board.”
This morning the oil price slightly increased from yesterday. The Barrel WTI (West Texas Intermediate) is currently priced at $50.74 and the Brent is at $56.59 dollars per barrel. The market is also eyeing on new data on oil production in the USA. In the evening, the equipment supplier Baker Hughes will publish the number of active oil rigs in the USA. On the market it is expected that the number has fallen slightly from 749 to 746 previously.