Oil prices have bounced off Friday's plunge lows, with WTI hovering around $45. The market for now is being driven by short-term headlines offering hope of a deal/production cuts (and rapid denial) and medium-term speculators unwinding bullish bets.
Oil is bumping up and down this morning…
As headlines from the OPEC/Algiers meeting dominate short-term swings…
- Saudis open to output cut in “critical” market – Some have questioned this, suggesting, “It looks like the Saudis are laying the groundwork for blaming the Iranians for the lack of a deal,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $5.2 billion. “They will be able to say it’s the Persians who are responsible, and then they’ll present something when it suits them."
- U.A.E. says freeze is maximum that could emerge from Algiers discussions- Production cuts not up for discussion in Algiers: Oil Minister Suhail Al Mazrouei
- Iraq oil minister confident OPEC will reach good decision
- Iran said to have put a proposal “on the table” at recent meetings that it should have 12.7% of OPEC output, or 4.173m b/d.
- Nigeria says "surely there will be" an oil agreement in Algiers, having said yesterday that it's "questionable that any freeze deal would be sufficient to affect the market"
“The Saudis and the Iranians are talking and they’re not as far apart as they were in the Doha meeting” in April when a proposal to freeze output failed, said Michael Poulsen, an analyst at Global Risk Management Ltd. “The symbolism would be more important than the actual number in the event that something is agreed to be cut.”
But Money managers increased bets on falling WTI prices by half…
Money managers’ short position in WTI climbed to 151,637 futures and options. Longs fell 1.9 percent to the lowest level since July. The resulting net-long position decreased 28 percent.
“The rhetoric around the meeting is ringing hollow,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund focused on energy. “What they say and do are completely different since they continue to increase production.”
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