After yesterday’s surprise agreement to cut production from OPEC, oil prices have continued to climb–West Texas Intermediate was up 3.07% to $50.96 as of 3:15 p.m. New York time this afternoon–but oil producer stocks have stalled with such leaders from yesterday as Pioneer Natural Resources (PXD) down 0.84%, Parsley Energy off 1%, and RSP Permian (RSPP) lower by 1.46%.
Yesterday I wrote that the financial markets’ reaction to whatever came out of OPEC’s meeting today would depend on how weak or strong the agreement to cut production was. Well, the actual agreement announced today to cut oil production was far stronger than expected. That surprise sent oil markets soaring today with U.S. benchmark West Texas Intermediate up 8.34% to $49.00 a barrel. The Brent benchmark rose 8.82% to $50.47 a barrel.
Oil prices were all over the chart on Wednesday, November 17, as negative data battled optimistic words. Look out for more days of this war as we get closer to the November 30 meeting of OPEC that is supposed to result (but might not) in an agreement to significantly reduce oil production in order to support oil prices
Hillary Clinton’s lead over Donald Trump isn’t as secure as it was just 10 days ago. Facebook (FB) busted above expectations for earnings but still fell big on cautious guidance. This week’s initial claims for unemployment came in at 265,000 instead of the 258,000 economists expected. The Standard & Poor’s 500 stock index is marginally lower going into the close–which would make an eighth straight daily decline. Oil continued to sell off as crude unwinds all the gains after OPEC’s promise of production cuts
This morning the U.S. Energy Information Administration announced that U.S. crude inventories had climbed by 14.4 million barrels for the week that ended on October 28. That’s the biggest increase in inventories ever in data that stretches back to 1982. Energy analysts had expected that inventories would climb but by a much more restrained 1.013 million barrels.
Definitely a bad weekend for OPEC. On Friday the Organization of Petroleum Exporting Countries failed to reach internal agreement on which OPEC producers would cut production. On Saturday, OPEC concluded talks with non-OPEC members including Brazil and Russia without an agreement on a joint commitment to limit production
Apple closed today down 2.25%. That was enough to make the technology sector one of the worst performing sectors of the day with a decline of 0.5%. The indexes also felt continued downward pressure from the healthcare sector, down 0.7%, and from a drop in oil prices.
