On Thursday, the oil market continued to trade in a volatile way, and after a short decline, when the quotes again updated the yearly low, moved into correction and finished trading with steady growth. Today, trading takes place in a narrow range, while maintaining a tendency to continue the downward movement.
The fundamental background in the market remains negative, but traders played most of the news that had previously put pressure on the market and now expect further development of the situation. The main concerns are related to the fact that OPEC announced oil reduction in the amount of 1-1.5 million barrels. According to many experts, this may not be enough to balance the market. At the same time, OPEC members position remains unclear. Earlier, Saudi Arabia stated that Riyadh cannot single-handedly balance the oil market. Other participants of the meeting, including Russia, have not yet clearly indicated their position. In this regard Russia and Saudi Arabia meeting at the G20 summit in Argentina may be very important. Reuters has previously circulated information that Russia and Saudi Arabia are now considering possible actions aimed at balancing the market associated with a reduction in production.
Earlier there were reports that the President of Venezuela, Nicolas Maduro, intends to submit a proposal to seriously reduce production quotas.
Therefore, the market is now showing restrained optimism on waiting for decisions from OPEC to reduce production quotas, but the key question is what will be the size of the decline? The further oil market tendency will depend upon this news inflow.
Today, in addition to geopolitical news, traders will also be watching fresh data from Baker Hughes, which will help assess future prospects for changes in US oil production and reserves. At the start of the US equity trade session, Brent oil is trading at around $ 58 a barrel.
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