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How Did Crude Oil Prices React to the Last 3 OPEC Meetings?

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OPEC meeting on June 2, 2016 

OPEC’s (Organization of the Petroleum Exporting Countries) meeting in Vienna is scheduled on Thursday, June 2, 2016. There aren’t any optimistic cues that the group will reach an agreement to cap production. OPEC members will likely continue to produce more to maintain their market share. Higher production will pressure crude oil prices. Bloomberg surveys project a lower chance of any production freeze at this meeting. Meanwhile, Brent crude oil prices rose ahead of OPEC’s meeting. For more on crude oil prices, read the first part of the series. The collapse of Doha oil producers’ meeting also suggests that there’s less likelihood of any production cuts in this OPEC meeting.

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OPEC meeting on December 4, 2015

On Friday, December 4, 2015, OPEC’s meeting was held in Vienna. The outcome of the meeting didn’t favor the oil market. Prices fell on the day. OPEC member nations didn’t discuss any price ceiling or collective production target for the group. It suggests that the group members can produce at record levels. So, the oil market would be flooded with excess oil and extend the global bear market. This also hinted at a new era of lower crude oil prices. Read OPEC’s Meeting: Is It a New Era of Lower Crude Oil Prices? to learn more. As a result, crude oil prices were under pressure after the meeting.

OPEC meeting on June 5, 2015

OPEC’s meeting in Vienna was scheduled on June 5, 2015. In this meeting, crude oil heavyweights continued to maintain their collective output of 30 MMbpd (million barrels per day) for the next six months. Over the past year, OPEC’s member nations have been producing crude oil that’s more than its collective output of 30 MMbpd. To learn more, read OPEC Maintains the Crude Oil Output Ceiling. This led to a consensus of oversupply. It put pressure on crude oil prices.

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OPEC meeting on November 27, 2014

In OPEC’s meeting in Vienna on November 27, 2014, it decided to maintain its collective output of 30 MMbpd for the next six months. This led to a consensus of oversupply. It put pressure on crude oil prices. As a result, crude oil prices accelerated their fall. The fall started in June 2014.

Crude oil prices after OPEC’s June 2, 2016 meeting

Why does OPEC need to manage oil prices? We’ll discuss this in the next part of the series. Meanwhile, we could see oil prices decline after OPEC’s meeting. Oil prices tended to fall after the last three OPEC meetings. Lower oil prices impact Middle Eastern and US oil producers like Saudi Aramco, National Iranian Oil Company, Warren Resources (WRES), Bill Barrett (BBG), W&T Offshore (WTI), and Bonanza Creek Energy (BCEI).

Impact on ETFs  

The roller coaster ride in oil and gas prices impacts ETFs and ETNs such as the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the PowerShares DWA Energy Momentum ETF (PXI), and the First Trust Energy AlphaDEX ETF (FXN).

In the next part of this series, we’ll discuss OPEC’s production and strategy ahead of its meeting.

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