All Eyes on Wednesday OPEC Meeting

November 28, 2016 9:09AM CST

While crude inventories have been plentiful for most of the year, the market has managed to rise considerably since bottoming out in February of this year. High inventories have been discounted due to rumors of production cuts by both OPEC and Non-OPEC producers. Very rarely do these production cut proposals yield any results, but stakes seem to be higher this time as many traders feel that a lack of an agreement will result in a 10-20% decline in prices. While that would be fantastic for consumers, producers feel differently. Assuming there is a deal on Wednesday, it will be interesting to see whether it is actually something of substance or a small concession that allows them to buy some time before having to readdress the issues in the first quarter of next year. There seems to be a pretty wide disparagement on just how much some of the OPEC and non-OPEC producers are willing to cut back. Many have flat out stated that they will not support any kind of cut, but we’ll see what kind of negotiations take place in a couple days. Either way, we should have the catalyst for the next move.

Crude Light Daily

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