This week oil opened at lower levels as a result from last week’s developments. Last Thursday and Friday OPEC members gathered in Vienna to discuss their future plans regarding oil production volumes. Due to the improved situation on the market, as well as the unforeseen shortages in supply caused by renewed sanctions on Iran and Venezuela’s financial crisis, OPEC members agreed to increase their production levels by 1 million barrels per day, as expected.
As previously discussed, increases of supply on the market always lead to price decreases, which is what we are seeing right now. The Brent variety of crude dropped down to $74.39, while the light crude traded near $68.74.
Nevertheless, even with the increase most OPEC states are still going to be operating at smaller volumes than they used to, so traders expect that oil will continue to slowly stabilize.
