Due to profit taking after the two-day rally, oil prices fell at the Asian session. November futures for crude oil WTU fell by 0.50USD, to 45.82USD per barrel at the NYMEX At ICE Futures crude oil Brent fell by 0.55%, to 47.39USD per barrel. October futures for RBOB gasoline fell by $0.02, to $1.38 per gallon. Spot price of Brent is at the level of 47.10 at the beginning of the European session and is slightly going down.
After the meetings of two largest world Central Banks, the US Fed and the Bank of Japan, oil market participants have turned their attention to the upcoming OPEC meeting, which will be held in Algiers next week. The Secretary General of the cartel Muhammad Barkindo said earlier, it is not expected that any decisions or agreements will be reached at this meeting.
However, later he said that, if some progress would be achieved during the negotiations, a new meeting where final agreements would be signed could be held later this year. The President of Venezuela, Nicolas Maduro, who faces serious problems with the country's budget caused by low oil prices, also noted that OPEC and other oil producers can reach an agreement.
However, skepticism in terms of the OPEC meeting is increasing, causing a negative impact on the market sentiment and oil prices. It seems that the largest members of OPEC cannot reach agreement to reduce or freeze oil production.
According to market participants, statements of the cartel about possibility to reach an agreement to limit oil production are made to ensure that prices do not fall below certain level. These statements are sort of the verbal intervention.
None of the major oil market or oil producers want to reduce their market share. Competition in the market is higher than ever, and major oil producers do not have an incentive to freeze oil production.
Today’s news will include the report of oilfield services company Baker Hughes on the number of active drilling rigs in the USA, which is an important indicator of activity in the oil sector of the U.S. economy, having a significant impact on the oil prices. Oil production is a profitable business considering current price levels, which is proved by the increase of the active drilling rigs in the United States (their number is 416 now). The report will be published today at 20:00 (GMT+3).