Crude oil continues to strengthen
After starting the week on a positive note on Monday, November 21, crude oil continues to move higher. At 5:30 AM EST on Tuesday, November 22, WTI crude oil futures contracts for January 2017 delivery were trading at $48.99 per barrel, a gain of ~1.6%. Brent crude futures contracts for January 2017 delivery rose ~1.8% to $49.80 per barrel.
Market awaits producers’ meeting on November 30
The increased expectations over the possibility of a supply cut improved the market sentiment and supported crude oil prices. At its previous meeting in Algeria, OPEC announced a supply cut for its members to 32.5 million bpd (barrels per day) from 33 million bpd. Initially, the expectations weren’t high for the successful execution of the announced supply cut. However, recent comments from the major oil-producing nations like Russia, Iran, and Iraq changed the sentiment.
Comments from oil-producing nations
Russian president Vladimir Putin commented on Sunday, November 20, that he sees “high probability” that the supply cut agreement will be reached at the producers’ meeting scheduled for November 30. Iran’s oil minister, Bijan Zangeneh, also had a similar tone, saying it’s highly likely that the producers will reach an agreement on supply cuts. On the other hand, Iraq’s move to improve the unity of the producers’ group raised expectations.
On Monday, November 21, Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), Total S.A. (TOT), and British Petroleum (BP) rose 6.7%, 3.0%, 2.4%, and 2.3%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) rose 4.2% and 4.7%, respectively.
In the next article, we’ll discuss the performance of metals in the early hours on Tuesday, November 22.