While commentaries from some of the OPEC member countries like Iran and Iraq continue to pose doubts over the possibility of an extension of the OPEC deal, Saudi Arabia's oil minister Khalid-al Falih remains quite an optimist.
Saudi Arabia and Russian Federation, in response to the surge in U.S. shale production, have signalled they intend to continue to extend the deal reached to cut production by 1.8 million barrels per day in November.
"We should expect healthier markets going forward".
Kuwait- Oil prices forecast to settle at satisfactory levels
The over 14,000 August $39 puts that changed hands is nearly 20 times the number of contracts previously outstanding for the bearish option, and it reflects the "crescendo of negativity" influencing the market, said James Cordier, founder of Optionsellers.com. Besides technical and economical hurdles, affordability is likely to be an issue in many developing economies as alternatives still require considerable subsidies due to their high cost compared with conventional energy, and global energy transition will be long and complex. U.S. inventories will continue downward trend.
Analysts said widening of positions by participants driven by pick up in demand in the spot market against tight stocks position on restricted supplies from producing regions mainly kept crude palm oil prices higher at futures trade. "We don't want to create a shortage or squeeze". In order to fuel a strong short-covering rally and in order to attract powerful speculative buyers, OPEC may have to agree to a 1-year deal and it may have to announce larger production cuts.
The comments lifted prices but still failed to push prices back to the $50 range, a level last seen two weeks ago.More news: Suspect in doctors' slayings once worked at their posh condo
In their view, production cuts would need to be extended into the middle of 2018, a concern Falih acknowledged implicitly. West Texas Intermediate, the USA benchmark for the price of oil, was down 0.76 percent to $45.87 per barrel.
With OPEC meeting in Vienna later this month, several nations have said they'd support an extension of the six-month agreement that began in January.
In the past, oil prices have risen significantly in the aftermath of an announcement by OPEC that it is cutting production, according to researchers, who examined all OPEC announcements between 1983 and 2008.More news: Kieran Tierney buzzing after Celtic rout of Rangers
Crude oil prices were moving between small gains and losses after an initial overnight surge.
"To increase production in those months may have a negative impact (on prices)".More news: Macron win 'a victory for European cooperation': Swedish PM Löfven
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