Expectation that OPEC production deal was unraveling dominated Monday’s Asian trading session. Market participant worries that OPEC producer countries may not agree on a deal to cut output coming Wednesday.
Saudi Arabia said on Friday it will not attend talks on Monday with non-OPEC producer to discuss supply cuts. Saudi Arabia’s energy minister Khalid al-Falih said on Sunday that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current level could therefore be justified.
His comments raised worries that preliminary agreement reached in September that OPEC countries would reduce its production to between 32.5million to 33 million barrels per day may fall apart.
OPEC oil minister meet on Wednesday in an effort to finalize that deal; OPEC also wants non-OPEC producers such as Russia to support the intervention by curbing their output.
The drop in oil prices is hitting U.S. inflation expectation, which has pulled down U.S. Treasury yields, which has finally knocked back the lengthy dollar rally
Technical Analysis summary
Trading oil this week ahead of the OPEC meeting, market sentiments remain mostly neutral and as do mine.