WTI continues to struggle to gain grounds despite last week’s agreement between the OPEC and participating non-OPEC producers to extend the current supply cut agreement until March 2018, which aims to reduce global supply by 1.76 million barrels. As US oil production continues to rise, adjusting to a lower price environment after the initial decline, traders are calling for OPEC to do more.
The price of WTI is down close to 2 percent in today’s trading so far as the producers rush to hedge while speculators go for covering the long positions. Positive comments from the oil ministers of two largest global producers failed to support price. WTI is currently trading at $48.7 per barrel while Brent is trading at $51.2 per barrel. Speaking in Moscow, after a meeting with his Russian counterpart Alexander Novak, Saudi Arabia’s oil minister Khalid Al-Falih said that OPEC is committed to bringing down the excess inventories to close to five-year average, a target which he sees being achieved in the very near future. He also hinted that he sees co-operation with Russia continuing even after the deal expires in March next year. The duo is committed to doing whatever it takes to reduce the inventory overhang and balance the market.
