On Monday, oil prices took a dip, with declines as high as 10% due to a firmer US dollar making contracts more expensive for holders of other currencies and no signs of ease from the supply glut.
Oil analyst at the London brokerage PVM Oil Associates, Tamas Varga, has said;
“We are going to have some volatility this week as lots of market-moving events will take place,”
This fall in oil prices comes just before an OPEC policy meeting on Dec. 4, where they shall discuss whether to adjust its production strategy.
Whilst most analysts doubt OPEC will cut production, they are aware that Saudi Arabia could warm towards the idea of working with other oil producers on price support measures. This is following Ali bin Ibrahim Al-Naimi, Saudi Arabia’s oil and mineral minister stating that as they are one of the biggest exporters of oil, they are ready to work with others to help stabilize the market.
Chief investment officer at Sydney’s Ayers Alliance, Jonathan Barratt, highlights Russia’s role as well as OPEC countries to control production, stating that it is important for “some sort of co-ordinated attempt to reduce production” between exporting countries.
For January, Benchmark Brent was down 25 cents at $44.61 a barrel (0728 GMT). U.S. crude dropped 10 cents to $41.61.
