The oil price pulled back overnight after speculation that a planned meeting by OPEC members will fail to cut supply.
Venezuelan Oil Minister Eulogio del Pino said yesterday that a meeting between OPEC and non-OPEC countries may happen "in the coming weeks" as the South American nation seeks support to boost the oil price.
The meeting may face headwinds from countries such as Russia who are quite satisfied with the current output and see no reason for cuts.
Iran has also refused to cut oil production in order to make up for lost revenue they suffered while under sanctions from the west.
“Nobody seriously thinks that OPEC will come up with anything that will tighten supply,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney.
“Having bounced off the support near $40, and without any further supply coming online, we’re moving toward the middle of the trading range of about $44 to $45 for West Texas.” He added.
Mike Dragosits, senior commodity strategist at TD Securities also thinks there will be no deal brokered in light of increased demand and a decrease in output from the US,
"In my mind, it's not necessary. Demand is growing and U.S. production is still in decline. I think we may see that in the second of the year, it's a more balanced market," he said.
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