No OPEC Meeting Scheduled Yet

Fears of a persistent supply glut still weigh heavily on the minds of traders. In addition, media reports that after more than a year of failing to agree any steps, OPEC and outside producers have stepped up diplomatic

activity to fix the supply glut. Saudi Arabia, Qatar, Venezuela and non-OPEC producer Russia said on February 16 they would freeze output.

In an early sign that Moscow will stick to the plan, Russia reported on Wednesday its oil output was little changed in February. Saudi Arabia has yet to report its production, but a Reuters survey this week found no sign

of an increase in February. Discussions among major oil producers, including Saudi Arabia and Russian Federation, agreeing to a production freeze were unlikely to reduce a global overhang in supply of more than

1-million barrels a day, other analysts said. The fight OPEC has been putting up in an effort to kill US shale oil has kept energy prices at historically low levels for an extended period of time. "Until we get into the spring

and see crude demand pick up, oversupply  will be on the front burner for the market".

OPEC production has surged since the group in November 2014 abandoned its traditional role of cutting supply alone to prop up prices, in the hope that lower prices would curb the growth of more costly-to-develop

competing supply sources.

JP Morgan said in an emailed note: “The combination of suggestive OPEC/Russia rhetoric and aggressive spending/production cuts from US shale players has helped sentiment enormously over the last few weeks.”

However, we see the price action to be rather speculative, with no guarantees from members of the Organization of Petroleum Exporting Countries (OPEC) and others, to reach a consensus on cutting production

rates to support prices.

OPEC is scheduled to meet officially in June this year; reports of a mid-March meeting between four producers have increased hopes of the organization finally considering cutting production. A Reuters report today

pointed out the likelihood of the organization agreeing to cut production to drastically low levels.

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