Crude oil in danger of falling to $40 if Opec fails to extend output cuts

Crude oil in danger of falling to $40 if Opec fails to extend output cuts

Oil prices were up for a second straight week as speculation ahead of the Opec meeting helped prices recover. The primary trigger for the market was the announcement last week that Saudi and Russia will extend the output cuts until March 2018. This is likely to propel prices further up in the near term before we get official confirmation in the Opec meeting this week

Before this bounce in oil prices, frustration about the slow pace of market re-balancing led to liquidation of long positions. The growing concern is that rising Non-Opec output, led by the US is increasingly offsetting the reduced Opec production. Official Opec data suggested that Opec cut oil output in April by more than pledged. Read more

Credits:economictimes.indiatimes.com

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