Mixed OPEC Messages Add To Price Volatility As Output Hits New Record

Major Opec and non-Opec oil producers are sending mixed messages regarding the potential for cooperation ahead of a major summit in Algiers later this month. This has led to further price volatility, as the market watches for signs of an agreement on production on the sidelines of the International Energy Forum (IEF) on 26-28 September.

Brent fell to $41.80/B on 2 August, but Opec’s 8 August announcement sparked a revival, with prices topping out at just shy of $51/B on 18 August, before declining again to $45.45 on 1 September. They were at $49/B as MEES went to press.

Despite the impact on prices, the upside of the most positive potential action voiced so far is pretty minimal. An agreement whereby Opec producers and other major players such as Russia and China agree to freeze production, would merely freeze production at close to record highs. (CONTINUED - 1763 WORDS)

DATA INSIDE THIS ARTICLE

table What’S A ‘Fair Price’? Recent Statements From Key Producers
table OPEC Wellhead Production, August 2016 (Mn B/D, Mees Estimates)