Sudden 22% drop in crude prices

A month ago OPEC was on defense against rising oil prices ahead of the midterms and a squeeze due to Iran.

Saudi Arabia and its allies opened up the pumps to help balance the market. Since then, the US relented on Iran sanctions with a host of waivers and the bottom has fallen out from crude, including 10 straight days of declines to end the week.

That sets up a surprisingly important OPEC fathering this weekend in Abu Dhabi. It’s a lower-level meeting ahead of December’s ministerial meeting.

The WSJ cites a Saudi source who says that Russia could oppose curbs.

“‘Saudi Arabia realizes that there might
be a need to reverse course next year and wants to look at the options,’
said a senior Saudi official.”

The gathering will study various proposals and one would show that under current production levels (actual, not targeted) there would be a surplus of 1 million barrels per day in the first half of 2019.


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