Can Oil Bounce Back as OPEC Meets?

Crude oil prices have been tumbling for much of the year as a supply glut, strong dollar, and geopolitical developments around the world continue to exert pressure.

Just last week, oil prices saw an uptick as the ongoing conflict in the Middle East escalated after Turkey shot down a Russian warplane it claimed strayed into its airspace. Russia is one of the world’s largest oil producers.

On Monday, during Asian trade, oil prices saw marginal uptick after falling over 1 percent on Friday. U.S. crude was up 18 cents, trading at $41.88 a barrel while the internationally traded Brent was up 4 cents at $44.90 a barrel.

Energy companies have been steadily cutting costs, projects, and jobs to cope with falling revenues as a result of lower oil prices. Earlier in the year, several big companies announced their intention to slash their global workforce to stay afloat – Royal Dutch Shell said it expected to cut 6,500 jobs.

Investors will be closely watching a meeting between the Organization of the Petroleum Exporting Countries (OPEC) in Vienna later this week, as they decide on policies to tackle the global supply glut which is keeping oil below the $50 benchmark.

Earlier this month, the Saudi minister for petroleum and mineral resources, Ali bin Ibrahim Al-Naimi, said at a conference in Bahrain that Saudi Arabia is ready to cooperate with other oil producers to stabilize the market.

Saudi Arabia is one of the largest exporter of petroleum.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.