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Crude Oil Prices

Crude Oil’s next move depends on Saudi Arabia and Trump

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Last month was crude oil’s worst in a decade, battered by supply concerns and global politics.

Trump and Saudi Arabia could determine oil’s next move: RBC’s Helima Croft from CNBC.

West Texas Intermediate, or U.S. crude, lost 21 percent in November, tumbling to its lowest level in a year and logging its worst performance since October 2008.

After sinking below $50, the days ahead could bring some relief, according to Helima Croft, global head of commodity strategy at RBC Capital Markets. This week, the cartel of oil-producing nations known as OPEC will make a decision on future levels of production that may determine where prices head in the near term.

Russia, OPEC meeting could put WTI oil back on path to mid-$60s by early 2019: RBC Capital from CNBC.

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Commodities

OPEC is sending a clear warning to Washington

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OPEC is sending a clear message to Wall Street banks and big investors: if Washington passes legislation that would allow the U.S. government to sue the cartel, the first victim will be shale.

Suhail Mohammed Al Mazrouei, the United Arab Emirates oil minister and the former president of OPEC, told a group of U.S. financiers Monday that if the so-called NOPEC bill becomes law, the cartel would stop working and therefore every member would raise production to maximum capacity, causing a crash in oil prices and thus the end of fracking in the U.S, according to people who attended the meeting.

Soon, the Senate Judiciary Committee, led by Sen. Lindsey Graham, could have a chance to determine NOPEC’s fate.

The American Petroleum Institute has stated its opposition to the measure, but OPEC is taking aim at the financial industry that plays a big role providing billions of dollars in debt and equity to U.S. drillers.

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Crude Oil Prices

Crude Oil market volatility seen continuing into the New Year

The oil market is under the thrall of macroeconomic factors that are weighing on the stock market and raising questions about crude demand in 2019.

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2018 Crude Oil Crash

Energy analysts believe oil market volatility will continue until the build-up in U.S. crude stockpiles reverses.
U.S. crude fell to an 18-month low on Monday, only to post its best one-day performance in more than two years on Wednesday.

Crude volatility partially due to Saudi saturation of market, says strategist from CNBC.

One catalyst for the oil market slump is Trump’s decision to allow several of Iran’s biggest customers to continue buying crude oil from the Islamic Republic despite U.S. sanctions. Anticipating strict enforcement, Saudi Arabia and several other countries hiked production before the sanctions snapped back into place last month. That pushed the market deeper into oversupply.

The U.S. government has agreed to let eight countries, including close allies South Korea and Japan, as well as India, keep buying Iranian oil after it re-imposed sanctions.

Iran’s biggest oil customers – all in Asia – had been seeking sanctions waivers to allow them to continue buying some of its oil and have argued that a total ban would spur a further rally in the price of crude.

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