Trading in oil futures is expected to open up mixed this evening after a series of events occurred this weekend related to the commodity. Markets closed Friday with the expectation that a meeting between OPEC+ – which typically refers to OPEC nations plus Russia – would be taking place Monday, however that meeting has now been delayed following a public spat between Russian and Saudi leaders.
That meeting is believed to be related to potential production cuts. Saudi Arabia has previously stated such cuts will only occur if other nations step in and cut their own production equally. In particular, both Saudi Arabia and Russia are pushing the US to coordinate cuts with the OPEC+ nations as a means of helping to stabilize global oil markets. The US is now the worlds largest petrol producer, and cuts without the nation’s involvement are not expected to be nearly as impactful.
President Trump strongly disagreed with that notion however on Saturday, instead electing to state that tariffs on foreign oil are not off the table. Instead he criticized OPEC as a whole, indicating that he’s never liked the organization and compared it to a cartel.
The meeting for OPEC+ countries is now said to be tentatively scheduled for Thursday, with the expectation being that the group will cut production by approximately 10% based on previous comments made by President Trump.
While much of the developments over the weekend were bearish for oil producers, there was some signs of hope. On Saturday, Norway indicated that it would agree to a production cut should other major global producers agree on a production cut. A senior leader from the Province of Alberta is also expected to be included on the call.
Alberta has previously instituted production cuts itself as a means of curtailing falling oil prices, with production limits still currently in place. Those production limits however are primarily related to oil sands product, with new conventional wells exempt.
With talks delayed until Thursday, Saudi Arabia has delayed setting the price for oil exports for May. That announcement is now set to take place April 10. While temporarily seen as a measure related to the delayed meeting, the country conducted the same move last month when negotiations were delayed. When an agreement was not met between Saudi Arabia and Russia, the organization elected to enact historic price cuts to its crude pricing, resulting in the global fallout of oil prices seen today.
West Texas Intermediate closed trading last week at $28.79 per barrel, after sinking as low as $19.29 at the start of the week.
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