Alejandro Nuñez graduated in Administration and Business Management at Universidad Complutense de Madrid. He holds a degree in Actuarial Science and a Masters in Corporate Finance & Investment Banking from the Instituto de Estudios Bursátiles (IEB). He is an expert in technical and quantitative analysis as well as an expert in Sectoral Analysis. XTB Spain Analyst.
The rise of crude oil futures (West Texas) from recent days is due to a boost in trust that the OPEC will reach an output deal.
Oil was up by 4.4 percent and stood at $48.90 in the London Stock Exchange on Monday, reaching three-week highs, after Goldman Sachs Group affirmed negotiations between OPEC members would come to fruition. Also worth noting is the rise in optimism among producing countries along with the market bias, which reinforces this short term trend seeking levels around $52 per barrel.
As the year ends, increasing trust in the oil global market may finally turn into a deficit by the end of next year. I now consider there are strong reasons for producers to implement a production cut to normalize stocks.
We must keep an eye on the Vienna November 30 meeting, a key date to reinforce optimism and the short-term trend.
Considerations from the representatives of major producing countries favor this small rally:
- Russian president Vladimir Putin affirmed he sees no obstacle for an OPEC agreement this month. He assures Russia is willing to freeze crude production to current levels.
- Iranian oil minister Bijan Namdar Zanganeh said it is “highly probable” that the OPEC reaches an agreement during the discussions.
- Iraq’s oil minister Jabbar Al-Luaibi stated that he will make proposals to help the organization reach an agreement.
In the crude options market CALL OPTIONS are on top for the first time since late-September.