U.S. West Texas Intermediate crude oil futures are in a position to close lower for the week after giving back all of its earlier gains. The week began with buyers setting a bullish tone amid speculation OPEC and its allies would extend or even increase their output cuts, however, prices turned south mid-week as reports began to swirl that President Trump was considering easing sanctions against Iran, a move that would lead to increased supply.
Essentially, the bullish sentiment at the start of the week was fueled by optimism over supply. The bearishness at the end of the week is being fed by a pessimistic outlook for demand.
The bullish factors this week were Saudi Arabia’s appointment of a new oil minister, OPEC and its allies’ pledge to continue to cut output by 1.2 million barrels per day, a bigger than expected drawdown in U.S. crude oil inventories and optimism over a potential breakthrough in the U.S.-China trade dispute.
Saudi’s Appoint New Energy Minister
What’s exciting the bullish traders this week is the appointment of Saudi Arabia’s king of his son, Prince Abdulaziz bin Salman, as energy minister on Sunday.
Prince Abdulaziz is not new to the oil game. He’s been a long-time member of the Saudi delegation to OPEC so he is familiar with its operations. On Sunday he said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million…