By Prince Okafor
As the price rally generated from the tentative production freeze deal by the Organisation of Petroleum Exporting Countries, OPEC, reversed, industry analysts see doubts on the rise on the possibility of a substantive an agreement in Vienna next week.
Chief Market Strategist at ForexTime, FXTM, Hussein Sayed, has observed that the best market reaction gauges are West Texas Intermediate (WTI) Crude and Brent, with both standards showing recent downward trends, shedding around $5 per barrel at the beginning of November and putting prices back to where they were before the tentative deal at the Algeria talks.
He stated: “Given the uncertainty, should investors bet on OPEC agreeing at the Vienna meeting on November 30th? The answer lies in whether positive sentiment can be sustained in the face of bearish fundamentals.”
‘‘The last meeting in Vienna showed OPEC members rapidly backing out of the supporting side for a production cut. Iraq and Iran were early retirees, and now Nigeria, Libya and Indonesia are heading towards the bench’’, he added.
The cartel benefited from its September talks in Algeria, managing to improve sentiment towards black Gold to the extent that it moved through the $50 level and started heading towards $52 per barrel.
Sayed noted that the US crude stockpiles boosted by 14.4 million barrels for the week ending October 28th, making it the largest weekly build since the U.S. Energy Department started keeping records in 1982 and adding to existing doubts that an OPEC production cut can seriously dent the over-supply on the world oil markets.
He said, “uncertainty is also building that Saudi Arabia would accept to reduce its own production while other OPEC members like Iran continue to go into overdrive and snap up more market share.