For the first time since July 4th, the front-month WTI Crude futures contract traded above $50 – rallying almost incessantly from $44 when the OPEC ‘deal’ was announced last week.
The catalyst for the latest move is more jawboning from OPEC, which as reported this morning, came courtesy of Algerian Energy Minister Noureddine Boutarfa who said during an interview on Ennahar television, that OPEC may cut 1% more output than agreed, although since virtually all of that production cut would have to come from Saudi Arabia, we are skeptical about the outcome. Boutarfa also said that OPEC’s initial target is to raise prices to $50-$55 in 2017, and added that it was easier now for OPEC to discuss a deeper cut as group is united, “speaking in one voice” after Algiers meeting.
As has been reported previously, OPEC and non-OPEC producers to hold informal meeting during Oct. 8-13 energy conference in Istanbul, one month before producers are to further assess market at group’s meeting on Nov. 30 in Vienna.
It appears that OPEC has finally figured out the central banker approach to manipulating prices: talk non-stop while doing nothing, and schedule increasingly more frequent meetings at which nothing is decided aside from the planning of future “imminent” meetings.
Meanwhile, going back to the market, we wonder if it is finally time for Oil Vol to drop?