Trump: OPEC is guilty of high oil prices

US President Donald Trump has made another accusation. This time, he blamed OPEC for high oil and fuel prices. And no doubt, most Americans probably think the same way.
Oil has risen more than twice since the beginning of 2016, after reaching levels of less than $30 at that time. And to date, US consumers are facing the highest fuel prices at petrol stations in 2014.
On Wednesday, the price of a gallon of normal fuel was at an average of 2.91 dollars, or an increase of 25%, a year earlier, according to AAA data.
The price of oil is too high, OPEC is behind that. It's not good, tweeted Donald Trump on Wednesday morning.

Saudi Arabia wants an oil price of $100

Saudi Arabia oil minister Khalid al-Falih and Russian energy minister Alexander Novak participated in a joint conference in Riyadh.
It became clear that the leading oil exporter, Saudi Arabia, would have been happy with a rise in the price of oil to 80, and why not even to $100 a barrel. This was accepted by investors and analysts as a sign that we will not see a change in OPEC's production constraints soon.
OPEC, together with Russia and several other leading manufacturers, began to jointly reduce oil production in January 2017 in an attempt to stabilize the cost of raw materials. They extended their agreement by the end of this year.
Recently, however, speculation is increasingly becoming among oil analysts that these measures will continue next year.
Over the past year, Saudi Arabia has become one of the main supporters of restrictive measures in the industry that will lead to a rise in the price of oil.

OPEC disputes

These days the oil segment has received a new food for thought, which makes players think about longer-term prospects for black gold. In particular, within OPEC there were contradictions in the question of the relevant price. Iran's oil minister believes that the cartel should support quotes at around $60 per barrel, explaining this by the fact that higher levels will lead to an even more active increase in production in the US shale fields. According to some estimates, if the average price of oil is $70, next year, Americans will produce 600 thousand barrels per day more.
Meanwhile, his Saudi colleague stands for oil at $70. Recall that the kingdom pursues its internal interests - the government needs larger oil revenues to finance large-scale economic reforms and IPO of the state oil giant Saudi Aramco. By the way, recently there were rumors that the initial public offering of the company's shares will be postponed to 2019, which means that Saudi Arabia will fight for higher prices longer than previously thought.
The emerging split in the cartel does not predict good news for energy prices. If Iran finds like-minded people in its initiative, which implies easing of restrictions in the deal, high discipline in the format of OPEC+ may be threatened. Then the level of $70 per barrel, above which Brent did not rise since the beginning of February, will become illusory for the market if the Saudis do not take measures that will strongly impress buyers or there will not be a large-scale supply disruption on a geopolitical basis.

Oil will drop after OPEC meeting?

Comments on the OPEC meeting sent the price of the Brent upward over the past week, but hedge funds saw a good opportunity to reduce their exposure to oil.
The latter cut their bullish bets on the Brent, taking advantage of the raw material growth.
Forecasts have shown that it is possible for the price of oil to fall significantly after the OPEC meeting, similar to what happened earlier this year.
The Brent is traded close to its highest value in two years before the OPEC meeting, which will be held on 30 November in Vienna. The Cartel and Russia are expected to extend their production cuts by the end of next year.
According to market observers, however, OPEC and Russia are still working on smoothing the conditions for the future continuation of the current conditions.
Market participants still remember what happened in May before the OPEC meeting. Oil futures rose 10% before the decision after which the price dropped seriously after disclosure of the redundancies.
Still, there are still many investors who believe that oil can continue to rise, at least until the OPEC meeting.

Oil at its highest levels for several months

Oil ended the last day of last week with an increase of nearly 1%, or to its highest value in a few months. This happened after OPEC countries decided after their meeting in Vienna that they would wait until January before deciding on their production cuts.
Brent ended last week with an increase of 43 cents, or by 0.8% to a level of 56.86 dollars a barrel. This is very close to the highest raw material values since September, commented market observers.
Brent received further impetus from Nigeria's presence at the meeting and comments from the country's minister that despite the fact that Nigeria was excluded from OPEC's production cuts, it actually produced less oil.
US crude oil finished with raise by 11 cents on Friday, or by 0.2 percent to a level of $50.66 a barrel. Continuous trading of the raw material over $50 a barrel causes many market participants to be positive about its future growth.
For the week, Brent added 2.2% while US crude rose by 1.5%.
For the past three months, oil has risen by more than 15 percent, which is evidence that the cut-off of OPEC production, by 1.8 million barrels a day, has its expected impact.

Oil with a one-month minimum on Monday

Oil fell to a one-week minimum on Monday after several OPEC energy ministers and off-cartel oil producers met to discuss oil production. Expectations, however, are that we will hardly see any more serious cuts beyond the current ones.
Brent futures, with delivery in September, fell by 18 cents to 47.88 dollars per a barrel. Crude oil prices lost 2.5% on Friday after forecasts for OPEC production growth in July.
US crude oil, with delivery in September, lost 20 cents of its value to a level of 45.57 dollars per a barrel.
Several oil ministers from OPEC will meet with producers outside Russia in St. Petersburg to look at the manufacturing situation.
Saudi Arabian Energy Minister Khalid al-Falih said the meeting would not consider larger production cuts in OPEC but would discuss production constraints on Nigeria and Libya.
Both countries were excluded from manufacturing cuts, recovering from years of crisis.
OPEC and Russia agreed to cut production by 1.8 million barrels per day from the beginning of this year to March 2018. According to Russian Energy Minister Alexander Novak, the deal has helped the market get rid of nearly 350 million barrels of extra production.

The situation with OPEC's production limits becomes even more bizarre

Do you remember that the OPEC countries agreed to extend their production restrictions by the end of the first quarter of 2018? And instead of jumping, the price of oil starts with their sharp depreciation...
Apparently, market participants still had concerns that OPEC countries would not be able to meet the accepted restrictions. And they were right. It became clear that in May the cartel actually increased its production.
The situation becomes even more bizarre in June. OPEC production again exceeds production constraints, pointing to the worst coordination between countries over a long period of time.
According to data from the International Energy Agency, world production rose by 720,000 barrels per day in June. Saudi Arabia, the largest producer within OPEC, produced more oil in June, a month earlier.
More oil has also produced by countries that are not officially involved in OPEC, such as Nigeria and Libya.
A total of 21 OPEC members reached an agreement at the end of last year, which aimed to cut production by 1.8 million barrels. The purpose of production cuts was to raise the price of oil. Low raw material prices have largely become a reality as a result of the rising production coming from the United States.
But, there is still good news about oil. MEA forecasts an increase in oil consumption of 1.5 million barrels per day in the second quarter, compared to one million barrels in the first three months of the year.

Oil collapsed last week

Oil prices dropped severely last week after Russia rejected OPEC's offer to reduce production.
US crude oil lost nearly 3 percent of its value, a similar decrease was also noted with the price of the Brent.
In May, OPEC, along with Russia, decided to continue its production cuts by the first quarter of next year.
A little later, however, it became clear that the OPEC countries did not stick to the agreement reached.
Obviously, Russia's response to the proposal has come precisely as a result of non-compliance with OPEC members' restrictions.
Many market experts comment that the depreciation of oil may recover after its last increase from the last week and again see a test at its lowest levels.

Oil is down, showing the maximum quarterly decline from 2015

Oil prices declined on Friday, interrupting the three-day rally, due to fears of investors that the growth in reserves and drilling activity in the US is offsetting the decline in OPEC+ production.
By 14.29 GMT, futures for Brent crude fell by 0.68 percent to $52.60 per barrel.
Futures for American oil WTI by this time were traded at $50.11 per barrel, 0.48 percent lower than the previous closing.
Prices for both benchmarks fell by almost 7 percent compared to the previous quarter - this is the worst indicator since the end of 2015.
The growth of drilling activity and oil reserves in the US undermines the efforts of OPEC and non-cartel states that previously agreed to reduce oil production during the first half of the year by a total of 1.8 million barrels per day.
Nevertheless, despite the OPEC+ pact, the market remains oversaturated, which is why most market players believe that the agreement will be extended to the second half of 2017.
One of the reasons that OPEC and miners outside the club can extend the agreement is the desire to support oil prices.

OPEC kept its forecast for global oil demand, reduced production in May

The Organization of Petroleum Exporting Countries (OPEC) has kept the forecast for world oil demand in 2016 at 94.18 million barrels per day. This is stated in the June OPEC report. Thе forecast in demand for oil in 2016 compared to 2015 is also maintained at 1.2 million barrels per day.
The oil market has become closer to the balance between demand and supply earlier than expected - due to unplanned supply disruptions from Canada and Nigeria, said OPEC in their statement. The organization expects that the oversupply will continue to decline.
Oil managed to close in positive territory last week and stay for Brent up than 50 per barrel, while the same level of US WTI was not kept. In addition to the wave of the strengthening dollar, which started on Thursday, the oil is under pressure also by the statistics.
Oil remains in an upward channel, and just returns to the levels at the beginning of the month as part of a short-term correction.

Trend growth in January can be considered broken after a decline to 48.00-48.50. A drop below would start a new downwards trend in the next few months. Important support levels in this way, able to trigger further collapse (if they would be overcomed) will become 50-day moving average (now at 46.90) and the 200-day (now at 42.90). We must not forget also about the level that separates bullish from bearish market. In the last week it was 53.03 level.
20% drop from the peak is at 42.40. This is the level of "withdrawing" of medium-term long positions. If oil loses 20%, it would no longer limited to these losses, and it will go further down.
Thus, the development of the downward trend can be separated into several stages with following important support levels: 48.00, 47.00, 43.00. The area between them seem more "soft" - without serious obstacles.