OPEC: ALGIERS STATUS QUO?

Although OPEC is meeting in Algiers, not a lot should be expected from Today’s meeting and we would probably have to wait until late November to see if an Agreement can be reach. Every Nation’s Members has a different agenda generally ranging from “freeze” to “increase” in output so a logical: outcome will probably be maintaining the Status Quo.

Nigerian Bonny Light news

moreAfter the force majeure on Bonny Light was lifted earlier this month, a recent bombing of an oil export pipeline on September 23 by the group militant “Niger Delta Avengers” is taking the export of Nigerian Bonny Light back to force majeure once again.

Bonny Light had slowly recouped since March reaching this month its highest export number since March, before this latest set-back. Nigerian economy will continue to suffer and the numbers for all Sub Sahel African economy will show a decrease as Nigeria is the largest economy in the region.

$45 a Barrel Still a reality

Combination of the above factors will translate into a price of the barrel still hovering around $45 for the foreseeable future along our earlier prediction. This is not good news for Latin America and Russia, all economies so dependent on Oil export. This is also creating a “bearish” atmosphere for Oil traders as money managers lose faith in OPEC members’ capacity to take a decision. The show between Saudis and Iranians opposing themselves on all front and thus blocking OPEC is an issue that we may have to learn to live with for some times.

Libya, Nigeria, Iran, Iraq and Venezuela have all indicated their support to a production freeze as they all need a higher price but Status Quo is probably the outcome of Algiers. So if today the Barrel trade slightly higher it is just speculation and we can expect a decrease in the next few hours/days.