Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Surprise Announcement from OPEC Makes Crude Surge

September 29, 2016 at 0:28 by Vladimir Vyun

The big news of the day was the surprise agreement of the Organization of Petroleum Exporting Countries to reduce oil production. The vast majority of market participants and analysts did not expect the talks to bring any meaningful result, and the surprise reverberated across the markets. Unsurprisingly, crude oil profited from the news.

Three countries are exempted from the production cut deal. Most notable of them is Iran who convinced its fellow OPEC members that it should be allowed to restore its output that has been hurt by sanctions from Western nations. Another two countries were Libya and Nigeria, which were targeted by terrorist attacks, resulting in supply disruptions.

For now, the exact details of the cut are not decided. They should be outlined at the OPEC meeting in Vienna on November 30.

Another welcome news for crude was the unexpected drop of US inventories. The Energy Information Administration reported that the oil stockpiles shrank by 1.9 million barrels last week while experts had forecast an increase by 2.4 million.

Futures for delivery of WTI crude oil in November were up 0.23% to $47.16 per barrel as of 00:09 GMT on NYMEX today after surging 5.3% yesterday. Futures for Brent crude settled 5.92% higher at $48.69 on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply