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Saudi Energy Minister Khalid al-Falih said he favored extending the current oil production cuts by nine months until the end of 2018 and said it was premature to talk about exiting the cuts. He added that OPEC would examine progress at its next meeting in June. WTI Crude is UP at $57.85; Brent is UP at $64.07.
Russia needs lower oil prices than Saudi Arabia to balance its budget. The Saudis are preparing a stock market listing for national energy company Aramco next year and would benefit from pricier crude. The API reported late Tuesday that U.S. crude supplies climbed by 1.8 million barrels for the week ending November 24. New supply numbers published today. WTI Crude is $57.85; Brent s $63.52.
Risk to oil prices is skewed to the downside this week even while positioning already reflects a high probability of the nine-month oil production cut extension. Doubts have emerged over whether Russia will agree to join OPEC in an extension beyond March, says Goldman Sachs. WTI Crude is $57.63; Brent Crude is $63.22
Expect volatile prices in anticipation of OPEC’s meeting. Prices might fall in the immediate aftermath of the deal as speculative length "sells the news". Fundamentals should keep Brent at an average of $60 a barrel this quarter, says Barclays. WTI Crude is $58.28; Brent is $63.52 this morning.
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