#OilPrices, for now, remain a tenuous product of “rhetoric” and “sentiment.”
As usual, Matt Smith at OilPrice.com brings the in-depth oil economics report. On the back of a promised (or at least proffered) 4% cut in production by Saudi Arabia and its Gulf State neighbors, as well as surprisingly low US inventory reports, crude was up in the +$0.40ish range as of this writing. Smith points out that in the face of possible Iraqi dissension, and Libyan, Nigerian, and Iranian exemption from the cuts, that Saudi Arabia will bear the brunt of the responsibility for limiting production. It remains to be seen how willing the kingdom will be to truly bite the proverbial bullet. See Matt’s full article here.
The bottom line, as Rakesh Upadhyay points out in another good analysis, is that until November brings a more solid and binding decision from OPEC, market variations come down to little more than “sentiment.”