Sunday , January 29 2023

Oil has been reduced by 5% to 17 months, despite the hatreds with sharp Saudi damages by Investing.com



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© Reuters.

Investing.com – Here are some tips for OPEC: Save your surprises in production and announce them in the New Year, because the market simply does not seem to be in the mood to listen now.

Saudi Arabia plans to cut oil production more than it did in its recent OPEC package, the The Vall Street Journal said on Thursday, citing documents that uncovered cartel efforts to be more transparent in terms of its production since its release two weeks ago 1.2 million barrels per day.

Instead of reacting positively, oil prices have merged with the Vall Street waves, hitting 17-month drops. West Texas Intermediate crude lost another 5%, throwing out winnings on Wednesday, built on a modest draw of US stocks, and the Fed's withdrawal rate, which, if anything, should have lower prices.

rose by $ 2.29 or 4.8 percent to $ 45.88 a barrel, the lowest closing price since July 2017. On Wednesday it rose by 2 percent.

U.K., the global oil index, rose by $ 2.89, or nearly 5%, to $ 54.35 per barrel, the lowest since September 2017.

With only six trading sessions for 2018, it seems that bears are in the ultimate control of oil movements, with any positive news that is considered noise or drowned in the countdown chamber for the end of the year.

"You would think that demand, along with a significant reduction in production from OPEC and its co-purchasers to the Russians, will have a market that is scared of the lack of supply in the New Year," wrote Phil Flinn, senior energy analyst at The Price Futures Group brokerage house in Chicago.

"Still, the oil market is being sold on fears that good times will not last, and it is hoped that US shale manufacturers will compensate for the decline in OPEC output even if their cash flows become more negative and the fall in prices will cause their losses."

VTI decreased 40% from four-year highs of almost $ 77 in October and nearly 25% lower during the year. Brent dropped by 38% from last year's level of almost $ 87 which hit two months and 19% less than last year.

Some think that VTI may fall below $ 40 in the coming days, stating a thinner trading volume that is typical of seasonal holidays and is more difficult to rely at this time of year to algorithmic trading models that focus on price action, ignoring all other basics.

Others point to continued growth in US, Russian and Saudi production, which flooded any oilfield.

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