JAKARTA (TheInsiderStories) - Global crude oil prices has slipped on Wednesday morning, June 1, 2016, as commodities brokers are choosing to wait-and-see the outcome of the upcoming meeting between members of the Organization of Petroleum Exporting Countries (OPEC), which is due to take place in Vienna, Austria, later on in the week.
At the New York Mercantile Exchange (NYMEX), July contracts for the US benchmark - the West Texas Intermediate (WTI) - has slipped by 23 cents to conclude trading at US$49,10 per barrel. Similarly in London, July contracts for the European benchmark - the Brent North Sea oil - has also slipped by seven cents to conclude trading at US$49,69 per barrel.
Traders are exercising extra caution, as the agenda of upcoming OPEC meeting - which is slated to begin on Thursday, June 2, 2016 - includes a review of current oil output among OPEC members, as well as recent trends in demand.
Currently, oil prices have rebounded from a nadir seen in January 2016, where it traded below US$30 per barrel - and the rising prices have somewhat alleviated the pressure among the world’s major oil producers to put a cap on their output in order to stabilize prices.
“There was a glimpse of hope that in this meeting, OPEC members will agree on some sort of a quota system - but seeing that prices have begin to climb, I don’t think the matter will be given much attention,” said an analyst for CMC Markets, Michael Hewson.
This will be the first OPEC meeting that involves Saudi Arabia’s new Minister for Oil, Khalid al-Falih, which took the office from Ali al-Naimi earlier in May 2016.
Market prices have managed to rebound in the past couple of weeks following a series of supply disruptions in Canada and Nigeria, but Canada’s output is expected to recover in the next couple of weeks.
Traders are also keeping an eye out for the release of China’s manufacturing index, which is due to be released on Wednesday, June 1, 2016. As one of the world’s largest economy, China’s demand for oil will definitely set the pace for oil price fluctuations.