While oil prices remain near a five year low, crude oil has jumped the most in two weeks which industry analysts attribute to indications that two nations that account for approximately nine percent of OPEC production may experience lower output in the near future.
This year, the US had its highest oil production in three decades and prices declined by about 20 percent following a decision by OPEC not to stop production, resulting in over 30 million barrels a day (the group’s output target) to be produced in the last six months. In November, OPEC pumped 30.05 million barrels a day- much more than needed from exporters in the first quarter, reports a Bloomberg article.
Bloomberg also reports Al Mazrouei of the United Arab Emirates claims OPEC will not cut output for at least three months, citing a belief that the market will stabilize on its own. Mazrouei stated via Twitter,
It is not logical nor fair to ask OPEC to reduce their production and not ask the other producers to stop their expected growth supply.”
The United States Federal Reserve is scheduled to meet this week to discuss a monetary policy, which is due Wednesday. Financial and oil analysts believe there is high possibility of an increase in interest rates, which will in turn have an effect on crude oil prices.
Read more here- “Oil Plumbs Depths as OPEC Refuses to Blink,” (William Watts and Eric Yep, MarketWatch)