• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 10 minutes Phase One trade deal, for China it is all about technology war
  • 12 minutes Trump has changed into a World Leader
  • 3 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 6 hours Indonesia Stands Up to China. Will Japan Help?
  • 3 hours US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 10 hours Shale Oil Fiasco
  • 24 hours Might be Time for NG Producers to Find New Career
  • 11 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 3 hours Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 7 hours Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 17 hours Beijing Must Face Reality That Taiwan is Independent
  • 1 day Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 21 hours Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 1 day China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Oil Capped Until OPEC Brings Evidence Of Output Cuts

Oil Capped Until OPEC Brings Evidence Of Output Cuts

U.S. West Texas Intermediate crude oil finished 2016 higher in what can best be described as a tumultuous trade. After a break early in the year, the market stabilized to trade sideways for several months before posting a strong rally into the end of the year after OPEC and other OPEC Non-members agreed to cut production on January 1 in order to reduce the global supply glut and stabilize prices.

We expected to see a firm opening this week as investors were likely to respond positively to the official start of the deal agreed by OPEC and non-OPEC members to reduce output by about 1.8 million barrels per day.

Adherence to the program will likely be difficult for some members give the past history of such deals. Therefore, OPEC will start monitoring the results only three weeks after its start. On January 21-22, the cartel and several non-members will meet in an effort the monitor adherence to the program and to address any problems that have arisen since it started. This is going to tell us a lot about whether the program will succeed.

I expect prices to be underpinned throughout the month because of optimism over the production cuts, but I’d be surprised by a huge breakout to the upside until we can see if the program is gaining traction.

Market gains could be capped in January by the rising U.S. Dollar and U.S. production.

Technical Analysis

Weekly March West Texas Intermediate Crude Oil

(Click to enlarge)

The…




Oilprice - The No. 1 Source for Oil & Energy News