Brent Continues To Slide On OPEC Division
Division between OPEC’s member countries added to worries about oil oversupply and kept Brent crude oil prices below $80. The commodity traded at $79.25 at 8:30 GMT on Tuesday morning as investors kept a close eye on the cartel ahead of its November 27 meeting.
Oil prices have fallen about 30 percent since June, something that several oil producing countries have found troubling. While some of OPEC’s members have made mention of allowing prices to correct themselves, others, like Venezuela, are calling for a defensive move that will help boost prices.
Many of the cartel’s members need prices to be above $100 in order to balance their budgets, so Brent’s recent slide has been detrimental to their economies. Others, like Saudi Arabia, have said they are willing to withstand low prices and say it is better to leave the value of oil up to the market. The division between members has investors wondering whether or not the group will be able to agree on a course of action at its upcoming meeting.
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On Monday, Reuters reported that Venezuelan President Nicolas Maduro said he was planning a global meeting to take place just two days before OPEC’s annual summit. Venezuela has been in talks with Russia recently in order to discuss coordination even though Russia is not a part of OPEC. Though in the past the cartel has not been successful in working together with Russia, the current climate in the oil market could push the two closer.
Moving forward investors will be watching for U.S. inventory data, which is forecast to show that the nation’s crude stockpiles fell by 1.2 million barrels last week. The Energy Information Administration’s report, due out on Wednesday, will also be closely watched, but the focus will likely remain on OPEC and whether or not the group is considering a supply cut.
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