On Monday, crude oil prices are rallying, up 2.58% to $47.25 a barrel in afternoon trading ahead of a key OPEC meeting where members must decide whether or not to curtail oil production.
The meeting is set for Wednesday, and investors are hoping that a deal to freeze or cut production can be reached; however, leaders of the Organization of the Petroleum Exporting Countries have been going back and forth on any potential deals, spurring volatile trading activity over the past few weeks.
Today’s gains are a recovery from last Friday, when prices fell as much as 3% on doubts if OPEC could even reach a deal, as well as Saudi Arabia’s announcement that it would not participate in talks with Russia and other non-OPEC countries amid disagreements on how to “share the burden” of production cuts. According to Reuters, Saudi Arabian Energy Minister Khalid al-Falih said “the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.”
If OPEC countries are able to come to a production cut agreement, oil prices will likely not rise very high, as global oversupply is still expected to be an issue. But if members cannot reach a deal, it shouldn’t be surprising if oil prices plunge as a result.
For other oil news, read up on the biggest U.S. shale oil field ever discovered: USGS Just Discovered the Biggest Shale Oil Field in America
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