Market Insights

December 19, 2016 • Posted in Market Insights

Week of December 12, 2016

  • Oil closed flat vs. last week but jumped 5% last night in Asia Monday AM trading, on news that non-OPEC producers had joined the 1.2 mm. bbl/day OPEC production cut deal and agreed to cuts totaling a further 558,000 bbl/day
  • Analysts believe that chances are good that Russia (the main non-OPEC participant in the deal) is likely to meet its commitments and that OPEC members will do the same in order to stabilize prices
  • The deal is likely to drive up production by US shale operators, which will displace imports and put renewed pressure on global oil prices
  • Natural gas prices rose to $3.72 per mm. BTU in trading Thursday as increased demand due to increasingly cold weather drives inventory draws higher

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