Oil prices rebound amid Cyber Monday boost, expectation on OPEC's December meeting

Gladys Abbott
November 29, 2018

CP issuers may have to divulge more info Corporates, non-banking finance companies (NBFCs) and other businesses may soon have to disclose key information for issuing commercial papers (CPs) - an unsecured, convenient instrument to borrow short-term fund - to mutual funds (MFs), the largest investor group, reports The Economic Times.

A fall of that magnitude would cause budget pressure, however. Therefore, I estimate that the WTI price over the next four weeks will range between $50.00 and $65.00. In January, Saudi production was below 10 million barrels.

"At current prices, Bakken producers in North Dakota are at real risk", Sen told Bloomberg, adding that even in areas of the Permian, production growth "will absolutely slow" if the current WTI prices persist.

A year ago, Saudi Arabia deferred a goal of balancing its budget to 2023 from 2020 as it ramped up spending to spur growth.

Resisting Trump's desire for lower oil prices would require the Saudi crown prince to go against the White House, just after the president publicly backed him following the killing of Saudi national and Washington Post columnist Jamal Khashoggi.

That prompted the country to cut subsidies, introduce a sales taxes and tap global bond markets three times in less than a year, borrowing billions to balance its books. The proposed move would compel CP-issuing companies to spell out their "asset-liability (AL) mismatch" that has deepened the stress in the financial markets.

Oil prices on Monday clawed back some losses from a almost 8-percent plunge the previous session, but Brent failed to hold above $60 per barrel amid generally weak financial markets.

"The energy complex is making a half-hearted attempt to extend gains", said Stephen Brennock, analyst at London brokerage PVM Oil.

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Despite the first serious efforts at diversification, oil still accounts for about 70% of government revenue and the energy sector makes up 40% of its economy.

Hansen noted that level would represent "around a million barrel per day above the agreed production ceiling" in the latest OPEC and non-OPEC accords.

The G20 meeting will be followed by Opec's annual meeting at its headquarters in Vienna on December 6, when the producer cartel will discuss its output policy together with some non-Opec producers, including Russian Federation.

That's exactly what Trump doesn't want.

One of the analysts expecting an OPEC-assisted rebound in prices is legendary oil trader Andy Hall, who was nicknamed "God" for profitably predicting oil prices.

The Declaration was an outcome of the Joint OPEC-Non-OPEC Producing Countries' Ministerial Meeting held on 10 December 2016 and was effective for an initial period of six months.

"The negative price reaction is as severe as the 2008 financial crisis and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a very over-supplied market", the bank said.

But he may not win the argument. This is repeated till a floor cap of say 25% below the reserve price is hit. More specifically, the 500,000-bpd Saudi cut is already being priced into the market, and the potential 1-mb/d cut from OPEC+ collectively is now increasingly being factored into the market as well.

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