Will we see oil sellers entering today before OPEC next week?

Oil prices will be looking at next weeks OPEC meeting to set near term direction. One source suggests that there is a rift developing as prices are seen to be ‘definitely high’ and more oil supply is necessary to weaken prices. A 500K bpd increase is being mooted. However, another source stated that there are no more relaxations of production cuts until June. Remember, if Saudi brings back their 1mln bpd they took out of the market in January then there is a risk for a circa 2mln bpd coming back on line. That would slam oil prices lower.

There is also a strong seasonal pattern for oil prices to fall in the coming days. There has been an annualised fall in oil prices of over 60% if you had sold oil every year between 06 March and 15 March.

There is the potential for more selling next week, so it is one instrument to watch out for.

Trade Risks: Any indication from OPEC that there are unexpected production cuts will invalidate this outlook.