5 Oil Stocks To Buy On OPEC Action Indications

On Monday, OPEC’s President Mohammed bin Saleh Al Sada provided fresh indications of talks between oil exporting countries in the bloc in order to arrive at an agreement on controlling crude production. Slack global demand and a fall in prices of oil may have led to producers considering such a move, according to a report in The Wall Street Journal.

Opinion remains divided about the likelihood of oil exporting countries reaching an agreement on controlling production. However, several market watchers believe that simply a discussion among the key stakeholders would be enough to boost sentiment. Adding oil stocks from sectors with relatively lower risk may be a good idea in such an environment.

OPEC President Sounds an Optimistic Note

Qatar’s minister of energy and industry and OPEC president Dr. Mohammed bin Saleh Al Sada sounded optimistic about the market for crude. In a statement made in Vienna, he said that he expected demand for crude to firm up in the second half of this year. Additionally, he emphasized that the worldwide supply of crude would decline during this period. 

Additionally, Dr. Al Sada also said that OPEC was closely watching the situation in oil markets and was regularly discussing with member countries about the possible methods that could be used to introduce a modicum of stability into the market for oil. More importantly, he said that the bloc’s members would most probably meet during the 15th International Energy Forum to be held in end September in Algeria in order to discuss the imposition of controls on production.

Prices Fall on Higher Domestic Production Outlook

Crude prices declined on Tuesday after the U.S. Energy Information Administration (EIA) raised its short outlook. According to the EIA’s new estimates, U.S. output will come in between an average of 8.73 million barrels in 2016 and 8.31 million barrels next year. This is higher than its earlier estimate of 8.61 million and 8.2 million for 2016 and 2017, respectively.

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