Thursday, 1 December 2016

Oil prices surge, trading volume records smashed as OPEC and Russia agree output cut-SapForex24

An agreement between oil producer club OPEC and Russia to produce less to drain a global glut sent prices soaring in record trading volumes on Thursday, even as analysts warned other producers will likely top up supply.

The Organization of the Petroleum Exporting Countries (OPEC)agreed on Wednesday its first oil output reduction since 2008 after de-facto leader Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.

The deal also included the group's first coordinated action with non-OPEC member Russia in 15 years. On Thursday Azerbaijan said it was also willing to engage in talks on cuts.

We Provide Best Forex & Comex Market Update-SapForex24

"OPEC has agreed to an historic production cut," analysts at AB Bernstein said. "The cut of 1.2 million barrels per day (bpd) was at the upper end of expectations (0.7-1.2 million bpd). An additional cut of 0.6 million bpd from non-OPEC countries could significantly add to what has been announced by OPEC."

The price for Brent crude futures (LCOc1), the international benchmark for oil prices, jumped as much as 13 percent from below $50 on Wednesday and was at $52.10 per barrel at 0806 GMT, although traders pointed out that part of the jump was down to contract roll-over from January to February for Brent's front-month futures.

U.S. West Texas Intermediate (WTI) crude futures rose back above $50 briefly before easing to $49.63 a barrel at 0806 GMT, though still up 20 cents from its last settlement.
"OPEC has delivered an agreement," said Jason Gammel of U.S. investment bank Jefferies. "Bulls got as much as could be hoped for...For the time being, oil prices have received a huge support."

The development also triggered frenzied trading, with Brent futures trading volumes for February and March, when the supply cut will start to be visible in the market, hitting record volumes.

The second front-month Brent crude futures contract, currently March 2017, traded a record 783,000 lots of 1,000 barrels each on Wednesday, worth around $39 billion and easily beating a previous record of just over 600,000 reached in September. That's more than eight times actual daily global crude oil consumption.

April Brent traded 288,000 lots of 1,000 barrels each, compared with a previous record of 228,7000 lots done in July 2014.

The records also meant that Brent volumes far exceeded trades in U.S. West Texas Intermediate (WTI) Crude futures, which tend to be higher than those for Brent, but which registered only 368,000 and 214,800 lots for March and April, respectively.

Despite the agreed deal, some doubts over the cut remained. "This is an agreement to cap production levels, not export levels," British bank Barclays (LON:BARC) said. "The outcome is consistent with... what OPEC production levels were expected to be in 2017 irrespective of the deal reached."
Meanwhile U.S. bank Morgan Stanley (NYSE:MS) said that "skepticism remains on individual countries' follow-through (on the cut), which is keeping prices below year-to-date highs (of $53.73 per barrel in October) for now."

Despite the jump in prices, they are still only at September-October levels - when plans for a cut were first announced - and prices are at less than half their mid-2014 levels, when the global glut started.
Goldman Sachs (NYSE:GS) said in a note following the agreement that it expected oil prices to average just $55 per barrel in the first half of next year.

OPEC produces a third of global oil, or around 33.6 million bpd, and the deal aims to reduce output by 1.2 million bpd from January 2017, similar to January 2016 levels, when prices fell to over 10-year lows amid ballooning oversupply.

Analysts said that the cuts would leave the field open for other producers, especially U.S. shale drillers.

"We do not believe that oil prices can sustainably remain above $55 per barrel, with global production responding first and foremost in the U.S.," Goldman Sachs said.
U.S. crude production has risen by over 3 percent this year to 8.7 million bpd, as its drillers have aggressively slashed costs.


  1. Get exclusive forex signals for daily profit. Forex trading signals from Sharetipsinfo includes USD Pairs, EUR Pairs, GBP Pairs,JPY Pairs and Other popular pairs. Forex Signals services also includes trading in Global currencies pairs, global shares signals, global indices and global commodities signals.

  2. Investment in stock market is the trend of today. Traders should choose commodity market as the medium of investment for highest returns from market. MCX Tips measure the risk of trading and manage it for the traders.

  3. Both Crude Oil February and Brent Oil March series are up 0.4 percent each at $ 53.96 and $ 57.07 a barrel, respectively.
    Crude Intraday Tips

  4. Get Forex signals for Currency pairs, Commodities, Shares, Indices. All signals are highly accurate assuring good returns. Try free forex signals now.

  5. An exclusive blog by sharetipsinfo for live intraday stock tips, share tips, equity tips, mcx tips, nifty tips, options tips and forex signals with 85% minimum accuracy.

  6. Live intraday stock tips for trading in stock future segment. And get stock tips, future tips Commodity tips, Forex Trading signal with 90% accuracy. For trial give us a missed call at 080 3063 6424.

  7. We are Number 1 Share Tips, Commodiy tips And Forex Trading Signals provider in India. To earn unlimited profit and regular earning join our services. For free demo call us at 8745025571.

  8. Sharetipsinfo provides best Indian Share market tips with high accuracy. Get accurate commodity tips, share tips, Forex signals, forex tips, currency trading, stock tips, share market recommendations and Indian stock market tips for sure profit. To get sure shot trading tips call our expert now at 08745025571

  9. Now even a novice trader can earn money like a professional by availing 85% accurate share market tips, commodity trading tips and forex signals for trading in currency pairs. Experience world class services and support. For More Info – Visit

  10. Kya aap daily ke stock market and commodity market ke losses se pareshan hai? Aapko lagne laga hai ke profit lena mushkil he nahi impossible hai?

    Solution – Don’t worry... Sharetipsinfo ko join karo and 85% accuracy ke sath daily share market and commodity market main profit lelo.
    Sabse badiya support high accuracy, Daily profit he profit.

  11. Now even a novice trader can earn money like a professional by availing 85% accurate share market tips, commodity trading tips and forex signals for trading in currency pairs. Experience world class services and support. For More Info – Visit

  12. Sharetipsinfo is one of the best share market tips provider in India. We give good share market recommendations, assuring stock traders earn good profit on the daily basis. For More info -