The oil price jumped almost 2 percent today after comments by the Venezuelan president that a freeze in production was imminent when OPEC and non-cartel members meet in Nigeria next week.
President Nicolás Maduro said a deal is nearing on production cuts which includes Iran who until recently had refused and reduction in output to make up for lost time after suffering in the wake of western sanctions.
“We had a long bilateral meeting with Iran’s president Hassan Rouhani. We’re close to a deal between OPEC producer countries and non-OPEC,” he told a news conference at the end of a summit of the Non-Aligned Movement, according to different sources.
Some believe that a deal within the next week is a long shot and that some of the Opec and Non Opec members will refrain from a production freeze.
“It is clear that at the moment, there is no consensus among the OPEC members, and what is the chance they will reach one in a week?” said Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia.
Chris Beauchamp of IG noted that the next 2 day’s will be a testing time for commodities as investors gears up for important data but the market has largely written off any major surprises such as a hike in interest rates by the Fed which may benefit oil,
'Today of course is the calm before the storm, as everyone gears up for the Bank of Japan and Federal Reserve decisions on Wednesday, so we can expect to see risk appetite more severely tested in the coming 48 hours, but for now bearish thoughts have been banished.'
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