New York recorded a drop in crude oil by 1.7% this is after it rose by 15% in the last four seasons. Bloomberg News survey found out that last month OPEC's production had been boosted to 34.16 million barrels daily. Russia now needs a non-OPEC oil producer to support it in its effort of reducing out. Russia has promised to cut 300, 000 barrels but OPEC is anticipating doubling the cut in every single day.
Russia is not part of the OPEC block but is willing to help in bringing down the output. The trimming of OPEC’s output has seen oil topping at $50 a barrel. The block agreed to trim its production further by 1.2 million barrels daily starting January 2017 year to take care of the supply.
Bob Yawger raised a concern that increase in OPEC production is one of the things that brings them down as a block. His other concern is the skepticism about the next meeting.
The West Texas International settled at $50.93 a barrel after dropping 86 cents. On Monday the contract was at $51.79, this is the highest record since July 2015. This period recorded 10% volume traded which is above the average of 100 days. Stockpiles at the delivery point at WTI, Oklahoma, and Cushing, increased by 4.01 million.
The challenge which OPEC faces in cutting the production is that some of its members from Africa who also produce largely are not in a position to reduce the output. The output from Angola rose by 170,000 barrel in a single day. Libya's and Nigeria's oil infrastructure has suffered sabotage and therefore cannot be affected by the OPEC cuts.
The OPEC has given an invitation to 14 nations who are its members on December 10 to plan for the way forward and how best they can handle the situation.
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