by Joseph Rokop
Oil prices broke on Monday, returning some of last week’s gains, after OPEC’s long awaited meeting in Vienna on Friday and Saturday. OPEC failed to “officially” agree on an increase in production on Friday, but released a joint statement with Russia on Saturday stating the conglomerate would increase production by 1 million barrels per day starting in July.
The WTI August contract broke 50 cents on Monday, settling at 68.08. The Brent August contract broke a bit further, down 82 cents, settling at 74.73. The WTI/Brent arb rally has been quite volatile intraday, but remains unchanged on the week, settling at -9.65 per barrel.
Crude rallied Friday, as traders expected a clear and concise production increase announcement from OPEC. Rumors stated that OPEC would increase production by 300,000 to 600,000 barrels per day. But, no deal was signed during trading hours, propping up the market, as traders feared unrest within the cartel.
On Saturday, Russia joined in talks with Saudi Arabia, the de facto leaders of the 1.72M bpd cut agreement, and announced an increase in production of 1 million bpd. On Sunday night’s Asian open, oil gapped lower as traders took profits to start the week following Friday’s rally.
As we turn the corner into a new week, here’s an inside look: