In the lead-up to the OPEC meeting, two things were happening. Analysts were saying OPEC would/should cut production and oil ministers from the key Persian Gulf countries were saying production would be unchanged.
The headlines from the past two days were a steady parade of oil ministers and newswire sources doing everything but promising quotas would be unchanged.
On Tuesday I wrote:
I'm reading research from SocGen talking about a 60% chance of a production cut on Thursday but I just don't see it. I think it's more like 5% but it's hard to get a good read on market pricing.
With the fall in oil leading up to the OPEC decision, I thought the market had got the message but the lesson — once again — is to never overestimate the intelligence of the oil market.
Overall, oil might be getting washed out here in a thin holiday market and the momentum trade is certainly a factor so there's no sense fighting this move.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.