OPEC, as well as the so called "OPEC+" partners have reached a tentative agreement on production cuts, causing the oil market to spike Friday. The cuts reportedly amount to 800,000 bpd on OPEC's part, and an additional 400,000 bpd (combined) from allied nations, including Russia. No specific cuts by country were committed to, or at least they were not confirmed in statements.
Despite earlier in the week price increases on global supply concerns (Iran), and Hurricane Michael making landfall in the Florida Pan handle in the afternoon, Wednesday saw oil prices slump 2% on intraday trading.
The Carolina's are bracing for a potentially "once in a lifetime" strength Hurricane and evacuations are already underway. Hurricane Florence is expected to make landfall Friday at a category 4, with the preceding rain & storm surge expected to begin early Thursday.
Oil was down today as the market weighed out OPEC speculation on one hand, and a drop in US Crude inventories on the other.
WTI was in the red today ahead of the EIA inventory report.
Today, the NYMEX continued it's winning streak - At the end of the day, we settled up across the board yet again, with Crude settling out at $48.75/bbl (+1.7%), ULSD climbed +.0268 to $1.5953 and RBOB edged up +.02111 to $1.6173.
Today saw oil prices have the biggest one day rally of 2017 thus far, with WTI Crude surging up 3.3% ($1.55) to settle out at $47.89/bbl. Likewise, refined products surged, with ULSD jumping over 5 cents (+.0516) to 1.5685, and gasoline jumped +.0394 to settle at 1.5962.
The oil markets were down sharply this morning on increasing cynicism that, essentially, global supply will not be driven down sufficiently by either OPEC or "non-cartel" producer production caps, or the summer driving season in the U.S. being upon us (despite the weather here in Boston, technically yes, its summer driving season).
Crude closed out today at over $50 ($50.44 to be exact) which is the highest close we've seen since June. ULSD closed up .0135 to $1.5958 and RBOB ended up .0050 at $1.4978.
On Wednesday, OPEC countries made a surprise agreement to cap production at 32.5-33 million BPD at their meeting in Algiers (if you’re keeping score at home, current production is about 33.24mmb.. insert yawn here, in other words). This marked the first deal since 2008, largely on account of Saudi-Iranian tensions – more on that later. Oil spiked on the news before backing off slightly over the remainder of the week.