2018-11-25 23:24:22 Source: FX168 Finance
FX168 Financial News (Hong Kong) News Investors' concern over oversupply has caused the crude oil market to collapse continuously. People can not help but are wondering whether the OPEC Summit in Vienna on 6 December will decide on reducing production. However, Bloomberg's analysis pointed out that this decision can be seen a week earlier.
The G20 summit next weekend may be the key to the development of oil prices in 2019. Saudi crown prince Salman and Russian President Putin are present. Saudi Arabia and Russia have been representatives of OPEC and its allies in recent years. Of course, US President Trump, who is a key person on the other side, also participates.
Bob McNally, a US consultancy firm Rapidan Energy Advisors LLC and a former White House Energy Officer, said: "I'm expecting President Trump to discuss oil price developments with the Crown Prince and President Putin at the G20 summit."
The analysis believes that when the Saudi crown prince is suspected of killing the Washington Daily Rapporteur Jamal Khashoggi, the support of the White House made it difficult for him to break Trump's wishes. "The markets assume that Saudi Arabia can not reduce production," said Energy Aspects Ltd., oil analyst Amrita Sen.
Insiders say Saudi Arabia and Russia's energy minister also travel to Argentina at the G20 summit. This makes people appreciate that Saudi Arabia and Russia intend to reach an agreement at an early stage as the starting point for the OPEC Summit. This is not the first time that two countries have used the G20 to define oil policy. A similar situation took place at the 2016 G20 summit in Hangzhou. At that time, two oil ministers met for a few hours and jointly published a press conference. A few days later they announced a decision to reduce production.
At present, Brent crude oil fell to 58.8 US dollars a barrel, with a drop of 22 percent per month and WIT crude oil approaching $ 50 a barrel. Trump sent this tweet: "Oil prices have fallen, good! Thank you, Saudi Arabia, but lower!"
And when the Saudi crown prince was suspected of killing American journalists, Trump said, "He can or not, he did not do it, he banned it." Trump promised that the matter does not damage the relationship between the two parties. . "We want oil prices to fall and Saudi Arabia does a good job," he said. In fact, low oil prices match the tax burden on the American middle class – the key to maintaining economic growth. Inflation is also decreasing, which causes the Fed to strive for price increases Trump hates.
Crude oil production in Saudi Arabia reached its highest level in November, or 10.8 million barrels a day, to 10.9 million barrels a day, compared to 10.65 million barrels in October.
But Saudi Arabia itself needs a high oil price to sustain other costs, such as the social economy and military spending. "We think that the country is introducing the" Saudi First "policy, giving priority to its own economic and social well-being and not a pleasing US President." Helena Croft, the chief asset strategist and former CIA analyst at RBC Capital Markets LLC, said.