{"id":7133,"date":"2016-10-24T20:56:13","date_gmt":"2016-10-25T01:56:13","guid":{"rendered":"http:\/\/nrgibroker.com\/?p=7133"},"modified":"2016-12-12T15:41:59","modified_gmt":"2016-12-12T21:41:59","slug":"oil-investors-ease-back-as-market-steadies-before-opec-talks","status":"publish","type":"post","link":"https:\/\/nrgibroker.com\/en\/oil-investors-ease-back-as-market-steadies-before-opec-talks\/","title":{"rendered":"Oil Investors Ease Back as Market Steadies Before OPEC Talks"},"content":{"rendered":"

Oil investors are playing it safe as OPEC hammers out the details of a deal to trim output.<\/span><\/h4>\n

Money managers reduced bets on falling prices to the lowest since May as oil held above $50 a barrel, prolonging a rally that began when the Organization for Petroleum Exporting Countries announced a deal to cut production to between 32.5 million and 33 million barrels a day. The group plans to finalize the agreement at a meeting in Vienna on Nov. 30.<\/span><\/h4>\n

“The shorts are not laughing off this OPEC deal anymore,” Phil Flynn, a market analyst at Price Futures Group in Chicago, said in a phone interview. “There\u2019s a growing realization that there\u2019s going to be a deal to lock in production. Things will be relatively calm until we get the agreements.”<\/span><\/h4>\n

Saudi Arabia\u2019s Energy Minister Khalid Al-Falih said Oct. 19 that many nations are willing to join OPEC in cutting production. So far, Russia has said it\u2019s considering taking steps to stabilize the market. Alexander Novak, the country\u2019s energy minister, said Sunday that “many scenarios” are being discussed. Venezuelan President Nicolas Maduro, on a tour of oil-producing countries to boost support for the deal, said Oct. 21 he\u2019s in favor of inviting the U.S. to the next OPEC meeting and creating an “alliance” of OPEC and non-OPEC nations.<\/span><\/h4>\n

\u201cThis week the market is in a pause after the run-up to $50,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There\u2019s still a lot of question about what OPEC is actually going to do next month. Absent that, people are waiting for some more direction than we have now.\u201d<\/span><\/h4>\n

In addition to slashing short bets in West Texas Intermediate crude by 21 percent during the week ended Oct. 18, hedge funds also reduced their long positions by 3.2 percent from a two-year high, according to the Commodity Futures Trading Commission. Net longs increased to the highest in two years.<\/span><\/h4>\n

Oil Inventories<\/span><\/h4>\n

WTI slipped 1 percent during the report week to $50.29 a barrel. The U.S. benchmark rose 0.1 percent on Monday to $50.91 as of 9:41 a.m. London time. Prices reached a 15-month high on Oct. 19 after government data showed U.S. crude stockpiles fell to the lowest level since January.<\/span><\/h4>\n

U.S. stockpiles dropped 5.25 million barrels to 468.7 million in the week ended Oct. 14, according to the Energy Information Administration, after reaching 512.1 million in late April.<\/span><\/h4>\n

“$50 will be the floor through the OPEC meeting, barring some spike in the dollar,” Price Futures Group\u2019s Flynn said. “With U.S. inventories falling at a rapid pace, the prospect of a cut or freeze has real consequences.”<\/span><\/h4>\n

In other markets, net-bullish bets on gasoline rose 9.4 percent to 40,085 contracts, the highest since March 2015, as futures climbed 1.5 percent in the report week. Ultra low sulfur diesel net-longs fell 7 percent to 8,439. Futures slipped 1.2 percent.<\/span><\/h4>\n

WTI held above $50 a barrel even as Russia\u2019s energy minister said the country may produce a new oil-output record next year. As OPEC members head into technical meetings Oct. 28-29, investors will be watching for details on country allocations. Iraq should be exempted from cutting production, Oil Minister Jabbar Al-Luaibi said Sunday.<\/span><\/h4>\n

“The market just wants to see the proof in the pudding,” said Carl Larry, director of oil and gas at consultant Frost & Sullivan in Houston. “We got to $50. That\u2019s as good as it\u2019s getting, going into the November election and the actual OPEC meeting.”<\/span><\/h4>\n

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Copyright: Bloomberg.<\/a><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"

Oil investors are playing it safe as OPEC hammers out the details of a deal to trim output. Money managers reduced bets on falling prices to the lowest since May as oil held above $50 a barrel, prolonging a rally that began when the Organization for Petroleum Exporting Countries announced a deal to cut production […]<\/p>\n","protected":false},"author":1,"featured_media":7134,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1017],"tags":[426,1143,854,1144,208,1141,300,1142,529,526],"class_list":["post-7133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-barrel","tag-barrels-a-day","tag-crude","tag-minister-khalid-al-falih","tag-oil","tag-oil-investors","tag-opec","tag-opec-talks","tag-russia","tag-saudi-arabia"],"_links":{"self":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/7133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/comments?post=7133"}],"version-history":[{"count":0,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/7133\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media\/7134"}],"wp:attachment":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media?parent=7133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/categories?post=7133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/tags?post=7133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}