WTI & Brent take a dive as Saudi Arabia threaten to boost oil production
It has been reported that Saudi Arabia are threatening to boost oil production unilaterally if some OPEC nations continue to defy the group’s output curbs, cartel officials say. (WSJ).
Leading into the OPEC meeting things were on the up as both API and DoE's produced a draw this week. There was also talk of not only extending the production cuts but making them deeper too.
Prior to this news, there were also reports that Saudi Arabia were looking at radical options, including a deeper collective oil cut, as Aramco readies for its IPO.
This is not the only time it has been reported that Saudi Arabia are getting tired that other OPEC countries are not pulling their weight. Last week there was talk that the New Saudi Energy minister was not impressed by the efforts of the other nations to comply. The article said, "Saudi Arabia will no longer compensate for other members non-compliance".
Now for the rest of the session oil traders will be looking to work out if this news trumps the rumours of more cuts and the extension. So far in an initial reaction, WTI fell from around USD 58.59 to a low of USD 57.91 per barrel.
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Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
