While it is far too soon to fully gauge the impact of OPEC’s recent announced production cuts, thus far, oil prices seem to have stabilized fairly quickly, suggesting the cuts may be less impactful than OPEC might have hoped.
After trading higher over the past few days, the price of West Texas Intermediate seems to have stabilized at just under $91/barrel.
Brent crude stabilized as well, although at a higher price at just under $95/barrel
Gasoline futures also have stabilized at around $2.60/gallon.
While the general trend in oil prices continues to be upward, and energy price inflation is well on its way to making a strong comeback in coming months, OPEC appears to be less of a contributor than some have feared.
That is bad news for Saudi Arabia, and also for Russia, which needs higher oil prices to help finance its war in Ukraine.
I used to trade CL and I still watch the oil market...it’s not acting like I’d expect based on prior behavior. Financial markets never fail to surprise you.