Oil prices have been steadily increasing over the past few trading days, with the price per barrel of U.S. crude reaching $45.66 and the Brent crude international benchmark hitting $48.18 on Monday afternoon. The recent surge in oil comes as OPEC and other major producers have renewed talks over a production freeze.
Last week, OPEC announced plans for an unscheduled meeting in September to discuss production levels. Although not a member of OPEC, Russia also volunteered to join the meeting, which will be held on September 26 through September 28 in Algeria. The announcement of the meeting alone was enough to send oil prices soaring over 3% last Monday.
OPEC’s new meeting comes in the wake of several near-crises in oil producing countries. Venezuela is quickly running out of cash and facing a dangerous food shortage, while Saudi Arabia has been forced to slash its budget, leaving thousands jobless and stuck in migrant camps.
Late last week, Saudi Arabia’s new energy minister, Khalid al-Falih, further inflated investors’ hopes of a freeze in production levels during an interview with the Saudi Press Agency.
“We are, in Saudi Arabia, watching the market closely, and if there is a need to take any action to help the market rebalance, then we would, of course in cooperation with OPEC and major non-OPEC exporters,” he said.
Although the minister’s comments seem like an important shift in mentality, Saudi Arabia has shown no other signs of slowing production recently. The kingdom boosted its monthly production by 30,000 barrels in July, and increased output from OPEC members like Iraq, Iran, and the United Arab Emirates further exasperated the supply glut.
It’s been nearly two years since OPEC decided to ramp up production in an effort to recapture market share from U.S. producers. The policy has led to the dangerously low prices we are seeing today, and it’s finally looking like OPEC member nations may not be able to sustain these production levels for much longer.
It's unclear what investors should expect from OPEC, but all eyes will be on the meeting next month. If the cartel decides to put a cap on production levels, prices will almost certainly go up. If the organization fails to make any changes, investor confidence will probably take the biggest dent.
Oil prices have been volatile lately and this is definitely having a big impact on investments in the energy sector. In this free report, we take a look at top investments for each oil scenario in the near term, be it bearish, bullish, or neutral. Click here to see the free report>>>
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Is OPEC Finally Ready to Freeze Oil Production?
Oil prices have been steadily increasing over the past few trading days, with the price per barrel of U.S. crude reaching $45.66 and the Brent crude international benchmark hitting $48.18 on Monday afternoon. The recent surge in oil comes as OPEC and other major producers have renewed talks over a production freeze.
Last week, OPEC announced plans for an unscheduled meeting in September to discuss production levels. Although not a member of OPEC, Russia also volunteered to join the meeting, which will be held on September 26 through September 28 in Algeria. The announcement of the meeting alone was enough to send oil prices soaring over 3% last Monday.
OPEC’s new meeting comes in the wake of several near-crises in oil producing countries. Venezuela is quickly running out of cash and facing a dangerous food shortage, while Saudi Arabia has been forced to slash its budget, leaving thousands jobless and stuck in migrant camps.
Late last week, Saudi Arabia’s new energy minister, Khalid al-Falih, further inflated investors’ hopes of a freeze in production levels during an interview with the Saudi Press Agency.
“We are, in Saudi Arabia, watching the market closely, and if there is a need to take any action to help the market rebalance, then we would, of course in cooperation with OPEC and major non-OPEC exporters,” he said.
Although the minister’s comments seem like an important shift in mentality, Saudi Arabia has shown no other signs of slowing production recently. The kingdom boosted its monthly production by 30,000 barrels in July, and increased output from OPEC members like Iraq, Iran, and the United Arab Emirates further exasperated the supply glut.
It’s been nearly two years since OPEC decided to ramp up production in an effort to recapture market share from U.S. producers. The policy has led to the dangerously low prices we are seeing today, and it’s finally looking like OPEC member nations may not be able to sustain these production levels for much longer.
It's unclear what investors should expect from OPEC, but all eyes will be on the meeting next month. If the cartel decides to put a cap on production levels, prices will almost certainly go up. If the organization fails to make any changes, investor confidence will probably take the biggest dent.
Oil prices have been volatile lately and this is definitely having a big impact on investments in the energy sector. In this free report, we take a look at top investments for each oil scenario in the near term, be it bearish, bullish, or neutral. Click here to see the free report>>>