Markets have already priced in a fairly sizeable production cut.
With plenty of crude oil available to the market at present and some OPEC members signaling that lower oil prices may be acceptable to the group, the stage may well be set for further tests of support over the coming weeks.
Oil prices have fallen since the release of worse than expected US oil inventory figures on Wednesday but the potential for the Iranian situation to worsen during the course of the IAEA meeting currently underway is keeping oil market participants wary.
Oil markets sentiment remains dominated by the escalation of attacks in Nigeria.
We would expect the potential for further chaos in Nigeria to provide a floor for prices above $60, and we expect that Nigeria will continue to be a major issue in terms of supply security.
If it weren't for the market's focus on short-term inventory data, the market would be a lot higher. We're retracing, even if the move upwards was not as big as it could have been.
With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness.
What we are seeing is not a function of the world running out of oil. What we are seeing is the legacy of a very long period where investment has been far too low. The problem is getting the oil out of the ground and delivering it to consumers.
People were expecting builds across the board. On that basis the market reaction that we have had is not surprising...It looks like product strength has the potential to return.
It's because we've had such an explosive rise in heating oil prices -- I don't think we've ever seen such a dramatic increase in the spread between heating oil and crude.