Borja Rubio is a Bachelor in Business Management & Administration by the Complutense University of Madrid. He is an expert in Management of Securities with Derivative Products by the BME (Spanish Stock Exchange). He holds a SIBE operator’s license and a MEEF operator’s license. He is also a Senior Account Manager at XTB.
Doubts on the direction oil may take in the coming weeks return to the market, the different OPEC members and Russia are constantly exchanging statements, and although the organization made a pre-agreement to cut output in its Algeria meeting, the situation is not clear at all. All of this has caused an 8 percent drop in WTI’s crude from annual highs of $52 per barrel, and similar decreases in Brent, a benchmark in Europe.
We consider the fact that the countries are discussing concrete figures as a positive, with talks of OPEC nations cutting between 200,000 and 700,000 barrels/day, which leaves a clear frame of reference in the negotiation process. The other key seems to lie on the countries seeking to be exempted (Nigeria, Iraq, and Libya), stating current or previous geopolitical conflicts. It seems OPEC members may actually concede to this petition, and it will be integral to reaching a final agreement.
An issue still on the table is the difficult relations between Saudi Arabia and Iran, where the latter is not entirely content with the exemptions being discussed, and of course Russia (non-OPEC nation) which although it has seemed willing so far, is not clear on whether it will cut production and lose its market share, since previous experience has taught us this scenario has already occurred. The next events will take place in late-November: the OPEC will meet prior to its meeting on the 25th, and then its annual meeting on the 30th. This reunion will take place two years after the organization voted against market shares. The new market shares announced at the end of November would be the long-expected news since said meeting.