Deal Or No Deal

The Russians are playing hard to get and in a global market that is focused on economic slowdown concerns, that is very bearish. Oil traders were assuming that OPEC was ready to agree to a production cut today, but now the Saudi oil minister is saying not so fast. The Saudi Energy Minister Khalid Al-Falih reportedly told reports in Vienna that no agreement had been reached on output cuts, and that members did not want to "shock the market" with significant changes in the cartel's current baseline. He said that cutting output by around 1 million barrels would be enough. He also said that non-member allies, such as Russia, are not willing to make similar decisions, "we will wait until they are".

The Russians in the past have shown that they are willing to go along with a cut, but they won’t say how much or when they want to implement it. That is not good for prices against a backdrop of a very nervous economy. The market wants at least a 1.3-million-barrel cut!  I think the Saudis want that as well, but they want Russia to take about 300,000 barrels a day of that. 

The Russian oil companies are pressuring President Vladimir Putin to not cut. The Russian oil companies are making money and can afford lower prices, but most OPEC members cannot. This gamesmanship comes as global markets are fearing that the U.S. China trade war is heating up and that could reverse the decision by China to buy U.S. oil.

Overnight markets tanked on the arrest of the daughter of Chinese technology company Huawei’s founder. The arrest of Meng Wanzhou, 46, who is Huawei Technologies Co Ltd.’s chief financial officer, raised concerns that the U.S. China Trade truce could be coming to an end. Reuters is reporting that Huawei is already under intense scrutiny from the U.S. and other western governments about its ties to the Chinese government, driven by concerns it could be used by the state for spying. The Chinese government is calling for an immediate release. The U.S. is also alleging that the company skirted sanctions and was selling technology to Iran and North Korea. The market shakeup continued as Reuters said that it threatened to inflame Sino-U.S. trade tensions afresh.

1 2
View single page >> |

Disclosure: Make sure you prosper all week. Stay tuned to the Fox Business Network where you get the Power to Prosper. Trade updates and levels. Call me at 888-264-5665 or email me at  more

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.