The price of oil rose today as investors took positions ahead of an OPEC meeting slated for later this week. Brent crude was trading up 48 cents at $45.34 a barrel at 1157 GMT, while U.S. crude futures were 32 cents higher at $42.03 per barrel.
It is expected that OPEC will not change its output policy, however oil traders on Friday strengthened their positions in preparation of outcomes from the meeting.
There is a fear by OPEC members that oil prices may fall further towards the $20 mark. Despite these fears OPEC and Saudi Arabia are determined not to reduce production and would only agree to a cut if large producers outside OPEC joined forces to cut output.
According to Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance, OPEC and Russia could make “some sort of co-ordinated attempt to reduce production”.
“The glut continues, but I do feel that it could be reversed quite quickly given the change in interest rates in the United States, which would indicate more demand.”
The end of the U.S. Thanksgiving holiday period will also signal a return to the market of U.S.-based investors. According to Poulsen of Global Risk Management, this factor will likely increase trading volatility later today.
The OPEC meeting should also include discussions about new supply from Iran.
Oil Prices Rise As OPEC Holds Meeting Today
