Malcolm Graham-Wood
Independent Analyst
After falling modestly yesterday the oil price has again ‘stabilised’ at around these levels after a speech in London given by el-Badri the Opec Secretary General. He must have been reading the blog as I have been suggesting that the more cuts that happen down here the higher the price will get to when Opec do control the market again. His words were ‘the market will rebound back higher than $147 in 2008 if producers stop investing and postpone projects’.
I use the word stabilise carefully rather than suggest that we have not got further to fall, at present especially with the results season starting on Thursday there is much pain to be felt in the next week or two, it will be most interesting to see how the major companies approach the situation. The other reason that I am incredibly cautious is that punters are coming back into the market in all sorts of ways. Last week saw the biggest ever open interest on ICE Brent at 1.64m barrels, admittedly it hasn’t been going long but nevertheless its high, as are figures from other exchanges and in commodity funds.
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