Market Insights

December 8, 2015 • Posted in Market Insights

Week of December 7, 2015

  • OPEC failed to agree on an oil production ceiling on Friday after Iran said it would not consider any production curbs until it restores output following the lifting of sanctions
  • Market reaction was swift, and WTI traded just below $40 on the weekend and Brent trading just below $43
  • Both WTI & Brent are near 2015 lows and are approaching levels seen during the global financial crisis of 2008
  • The formal communications from OPEC following this meeting did not include the usual statements that members would respect production quotas
  • Some analysts see this as an indication that OPEC members will continue to produce based on their individual needs, adding to oversupply
  • Propane and butane prices are rising based on seasonal heating demand
  • As a result, ethane is the low-cost cracker feedstock and is expected to remain strong until Spring

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