Oil Pares Early Gains As Magnified Speculation Dissipates
The crude oil market was in a state of overblown volatility in thin liquidity on Monday, amidst rising speculation that the world’s two largest oil producers would agree on an output cap deal at the G-20 summit in China, after Reuters had reported that Saudi Arabia’s Energy Minister Khalid al-Falih was set to make a “significant announcement” at a news conference at the summit being held in Hangzhou.
Nonetheless, the outcome of Al-Falih’s speech disappointed markets as what was delivered failed to meet market expectations. According to reports, Al-Falih and his Russian counterpart Alexander Novak will set up a working group to monitor the oil market and come up with recommendations to promote market stability. Besides the meeting in Algeria in late September, the two leaders will also meet in Vienna in November to discuss how to cooperate under the new agreement.
Oil prices immediately trimmed sharp gains made earlier, falling off from the nearly one week high at 46.51 per barrel to as low as 44.74 per barrel after the statement.
Sell Stop at 44.90, Take profit at 44.50, Stop loss at 45.20