Oil Rises as Supply Gap Will not be Filled in Short Term

September 25, 2018 Share Print 0

Oil prices are higher on Tuesday. In the aftermath of the Organization of the Petroleum Exporting Countries (OPEC) and Russia meeting in Algiers the supply picture has not changed.

The sanctions against Iran have already had a negative effect and if major producers did not announce a ramp up there will be a short fall.

Prices continue at 4 year highs as geopolitical and weather factors have supported current price levels.

OPEC members appear to have learnt the lesson of four years ago. The oversupply battle waged against shale producers in the US caused energy prices to drop.

A coordinated approach to limit production has produced stability and at this point Saudi Arabia and Russia are leading a gradual path despite external pressure.

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.