Hope to keep market tight as prices start to recover
OPEC and its Russia-led partners are leaning toward extending oil production cuts for another two to three months, the WSJ reports.
An officials familiar with the discussions says the hope is the cuts will keep markets tight even as prices start to recover from Covid-19-inspired lows earlier this year.
The group will meet next week (Monday/Tuesday) to discuss the issue. The recent rise in crude oil prices gives some countries more reason to oppose continued production cuts.
In April, the OPEC 13 members and 10 Russian led producers, agree to carry out record production cuts of 9.7 million barrels a day. Those cuts would be phased out as the recovery developed from Covid.
Crude oil futures are trading down $0.31 at $45.40 for the January delivery. The high price today reached $46.09. That was a short of yesterday’s high price of $46.26. The 61.8% retracement of the move down from the 2020 high in January comes in at $46.43. Low today at $44.55 which was just below the swing hi from August at $44.59. Stay above that level keeps the buyers more in control.
Although well off the low from April at $26.22, and the November low at $34.04, the price is still is well below the 2020 high price of $58.92.