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Crude Oil Is Weaker in the Early Hours on November 1

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Nov. 1 2016, Published 8:53 a.m. ET

Crude oil trading at one-month lows

After starting the week on a weaker note, crude oil prices are trading below the one-month low in the early hours on November 1. At 6:00 AM EST on November 1, the West Texas Intermediate crude oil futures contract for December delivery was trading at $46.75 per barrel—a fall of ~0.26%. The Brent crude futures contract for January 2017 delivery was trading with a gain of ~0.16% at $48.66 per barrel.

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Speculations about the output freeze deal

Speculations about the execution of the crude oil output freeze deal have been weighing on prices since the beginning of this week. In producers’ meeting in Vienna last week, OPEC (Organization of the Petroleum Exporting Countries) producers failed to reach an agreement about how to execute the announced output freeze to limit crude production. Also, doubts about Nigeria, Iran, Iraq, and Libya’s willingness to take part in the production cut deal increased speculations about the execution of the proposed cut. In the previous meeting held in Algeria, OPEC members announced an output cut for all of its members to 32.5 MMbpd–33 MMpbd (million barrels per day). In September, OPEC produced 33.4 MMbpd of crude oil.

The market is waiting for producers’ meeting in Vienna on November 30. OPEC will likely announce individual output quotas. The market is also looking forward to weekly crude oil inventory reports by the American Petroleum Institute at 4:30 PM EST today. The data are followed by weekly inventory data from the U.S. Energy Information Administration. The data will release on November 2.

On October 31, major crude oil producers such as Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total SA (TOT) fell 4.6%, 2%, 1.1%, and 0.39%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) fell 2.3% and 4.1%.

In the next part, we’ll discuss how metals performed early on November 1.

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