All eyes will be on Friday’s close this week in the May Crude Oil futures market because of the breaking news on Thursday regarding the anticipated OPEC production freeze meeting on March 20 in Moscow. Speculative buyers drove the market higher during the week in anticipation of such meeting, and these same traders could take the market down if the meeting becomes a non-event.
Supply rose again last week according to the U.S. Energy Information Administration, but traders decided to ignore this news, instead shifting their focus on the possible meeting. The theme this week for traders appeared to be “focus on the future and not on the past”. The future is a possible production freeze and lower U.S. production. The past is oversupply caused by excessive production from OPEC and the U.S. producers.
Crude oil prices had settled into a sideways-to-lower range earlier in the week on demand concerns from China, but news of a potential meeting to discuss a production freeze between OPEC and Non-OPEC countries triggered a massive recovery.
The meeting, led by Saudi Arabia and Russia, was expected to be a discussion about a global pact on freezing production, however, doubts about the meeting were cast late in the week because Iran had yet to say whether it would participate in such a deal. In February, Iran said it would ramp up production to try to get back to pre-sanction levels as quickly as possible and that the production freeze plan was a…