Oil up 5th week ahead of OPEC meet; resistance building
Investing.com — Non-stop chanting about Saudi output cuts; forecast-beating U.S. economic growth and fewer Americans filing unemployment claims despite moderating jobs growth — oil has little reason not to rally.
New York-traded West Texas Intermediate, or WTI, crude, along with London-based Brent oil both finished up for a fifth straight week, riding the rhetoric that supply was getting critically tight versus supply — although weekly petroleum data from the U.S. government barely supported that notion.
But after a gain of as much as 14% for July alone, the rally is beginning to show some strain.
The market treaded water most of Friday before settling higher towards the end. Earlier, longs in the game appeared undecided on whether to take profit and re-enter with new positions on Monday or hold on hold for another week till next Friday’s OPEC meeting where more jawboning on oil prices was expected.
“OPEC knows it has a good thing going and it’s unlikely to pass up on the opportunity to use the hailer again to drive home the messaging of the perma cuts by the Saudis,” said John Kilduff, partner at New York energy hedge fund Again Capital. “Oil bulls also know that the cuts mantra will be echoing all of next week and that explains why so few want to take profit in today’s session.”
The Saudis have pledged to take an additional million barrels per day off their production for all this month — and possibly forever — if that meant keeping the market above $80 a barrel at any time.
That promise is a powerful motivator for oil bulls as Saudi production would theoretically drop by a total of 2.5 million barrels daily from their norm of 9.5 million a day. With cuts pledged by Russia and nine other oil producers participating
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