The long waiting OPEC meeting has finally come to an end and the leading oil investors are feeling a great level of comfort due to the extension of oil production cap program. Both OPEC and non-OPEC members have appreciated this decision and the aggressive Aussie traders are cautiously waiting for the price action confirmation signal to enter long in the oil market. The price of oil was drastically falling in the global market due to the oversupply problem and most of the leading oil investors were worrying due to extensive selling pressure in the market. But things settled down to a great extend after OPEC declared cap in the production oil to bring stability in the energy field. After this drastic action, the professional Aussie traders made a decent profit by entering long in the oil market. Such a drastic action from OPEC has not been seen since 2008 and leading economist are considered it as the perfect step to bring stability in the energy field.
Sentiment of the leading oil producing countries
Most of the leading oil producing countries in the global economy have appreciated OPEC decision to bring stability in the energy field. Countries like Saudi Arabia and Kuwait has already limited their current production rate and they have told that they will cut their oil production more than they promised in order to stabilize the energy field. However, Iraq is still producing on a large scale and the leading investors are conscious about this factors as this might fuel up the oversupply problem in the global market.
In the past, the active number of oil rigs in U.S economy was only 12 but over the span of 12 months, they have more than 728 fully functional rigs. An active production from such a large number active oil rigs will wash away the effort of OPEC meeting. But the U.S government has already stated that they will not create oversupply problem rather they will also try to stabilize the energy field in the global market. The professional traders in the options trading industry are now currently looking for long oil with bullish price action signal to ride the possible long bullish rally in the price of oil.
Impact of OPEC meeting
The OPEC meeting was supposed to ease the oil investors in the global market but after the nine-month extension of the currency production cap, some of the leading oil investors are now disappointed as they were expecting a much rigid decision. The price of U.S crude went up by 0.47 percent in the global market and traded at $49.12.On the contrary, the price of Brent went up by 0.52 percent on the ICE Futures Exchange in London and traded at $51.74 a barrel.
Though the price went up the investors are now eyeing in the production rate of Iraq and active oil rigs in the U.S economy. Iraq is now producing 3.8 million barrels per day and a cut in their production cap will significantly help the price to shoot up in the market. On the contrary the other leading oil producing countries like Saudi Arabia, Kuwait has still maintained the production cap of 1.8 million barrel per day and they are most likely to tighten their production rate further more.
Summary: The oil investors are now little bit eased as OPEC has extended the current production cap program for another nine months. However, an active participation from the U.S government and Iraq is required to maintain the stability in the energy field. If things continue in such a fashion then we will see a decent bullish rally in the price of oil near future. However, the expert is overly cautious as a sudden oversupply problem or ride in U.S crude stock might create extensive selling pressure in the market.
