The decision by OPEC-members to keep oil production output at record high levels ... suggested that the organisation was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term.

Sanjiv Shah

Categorized in : Energy

The Chinese government is trying to manage the market moves and reduce volatility. However, the trend of slowing growth as manufacturing continues to perform poorly is clearly worrying traders.

As we see higher oil output from (non-OPEC) Russia, Iraq and, most importantly, Saudi Arabia, we are likely to see continued pressure from the resultant low oil prices. This will affect U.S. shale producers as well and therefore an increase in new investment in the sector is unlikely. This will support prices in the medium term.

The decision by OPEC-members to keep oil production output at record high levels ... suggested that the organization was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term.

As we see higher oil output from (non-OPEC) Russia, Iraq and, most importantly, Saudi Arabia, we are likely to see a continued pressure from the resultant low oil prices. This will affect U.S. shale producers as well and therefore an increase in new investment in the sector is unlikely. This will support prices in the medium term.