Oil prices rose almost 3% on Monday yesterday (8/9/2016) after growing speculation that OPEC will again try to control their output. Rumors that appears is supported by the statement of the President of OPEC and Minister of energy of Russia, thus easing fears of a deluge of surplus oil that had previously been suppressing the price plummeted to a low level of up to three months. However, market participants still tend to be careful.
OPEC Would Freeze Output In September?
The Wall Street Journal late last week reported that OPEC countries such as Venezuela, Ecuador, and Kuwait, want to pioneer again the cooperation between the Member countries of OPEC with non-members such as Russia, in order to control the global oil supply. Similar alternative form of freezing the level of output was previously failed in April after Iran denied its demands to join the deal, while Saudi Arabia refused to run if not all OPEC member countries promised to do so.
Qatar's Energy Minister who also serves as the current President of OPEC, Mohammad bin Saleh al-Sada, yesterday stated that the decline in oil prices recently and the market volatility now is merely temporary. In addition, he indicated if OPEC continues to monitor developments and always rolling out active discussions to stabilize the market.
The comments further strengthened speculation will strive in his back output, possibly freezing cooperation at a meeting of an informal side by side with the International Energy Forum in Algeria on 26-28 September. Moreover, the Energy Minister of Russia, the world's largest oil producer countries, revealing that although it assesses the price of crude oil is not on the level that requires intervention, but he remains open to negotiating with OPEC.
The Rally In Oil Prices Is Still In Doubt
However, market participants have not yet entirely sure oil prices will recover again.
Most experts interviewed Reuters assumes that OPEC'S intervention inevitable, due to myself because of the growing number of u.s. oil wells and a weakening demand for oil. The reason, Baker Hughes on Saturday and then reported that the amount of oil drilling rigs in the land of Uncle Sam has increased for the sixth consecutive week, while crude oil supplies instead of dropping even grew.
However, most market participants addressing the current oil price rise with more caution. Last night alone, the price of oil briefly rose 4% to the highest price in one session, but then flattens out towards the closing of the market after news that the Louisiana Offshore Oil Port will increase its capacity of 2.5 million barrels in April 2017.
Matthew Tuttle Tuttle from Tactical Management in Connecticut, the United States, said, "until proven otherwise, (the rally in oil prices) this is still a correction in the market is bearish (price increase while only). You can experience the massive (price) movement like this, and if you could download the trading-fuck it up, (it) was great. But if you want to see the rally again to $ 50 and more than that, I'm not ready (memproyeksikannya). I think we will still see prices fall to below $ 35 a barrel before it gets to $ 50. "
The WTI oil prices currently are at a range of $ 42.60 a barrel, slightly lower than the closing last night at $ 43.02, but still above the low $ 40 level contained last week. Meanwhile, Brent oil is now traded in the range of $ 44.95, whereas last night closed at $ 59 a barrel.
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