Black Gold is falling due to the doubts that the OPEC countries will limit the production
Oil prices are falling on Monday after Iraq’s statement that it must be free from the obligations within the limits of the OPEC cartel agreement on the reduction of raw material extraction. In addition, oil prices have been influenced by the increase in the number of oil drilling rigs in the United States.
At the weekend Iraqi Oil Minister Jabbar al-Laibi told the media that the extraction of raw materials in Iraq was increasing in October and could be even higher, because the global corporations were increasing the production at the fields.
The Russian Federation still doesn’t impose clear commitments on itself. The Russian Energy Ministry quoted Energy Minister Alexander Novak: “Russia and Saudi Arabia are conducting the joint monitoring and carrying out the development of proposals on the coordination of actions in the oil market. We still have time until November 30, when the OPEC is planning to develop a joint solution. Now we are experiencing the coordination of positions.“
A negative factor for the market is the growing number of oil drilling rigs in the United States. Their number has increased by 11 – up to 443 per week (the data have been provided by Baker Hughes). This level has been increasing for several months.
On the London Stock Exchange the price of futures contracts for Brent crude oil for December has fallen by 0.5% to $ 51.54 per barrel to the beginning of the day.
The cost of December contracts for the US WTI crude oil has fallen by 0.6% to $ 50.55 per barrel during the session on the New York Mercantile Exchange.
The euro, having fallen against the dollar by 0.2%, is being traded near the seven-month low. The market is still waiting for signals from the ECB regarding the continuation of a bond purchase program after the expiry of the current term of its validity.
As previously known, in late September the OPEC participants came to a preliminary agreement on the reduction of oil production to the level of 32,5-33 million barrels per day. There is a probability that the terms of the contract will be finally coordinated at the November meeting of the cartel. It is expected that the Russian Federation can join an agreement.