Analysts battle to fathom effects of still uncertain Opec oil production cut
Oil traders say the biggest impact of any production cut Opec ministers agree on at their November 30 talks will be in contracts for delivery early next year
Singapore — As Opec oil ministers cartel prepare to thrash out a still uncertain cut in crude output, traders are jostling for position in futures and options markets to capitalise on any deal. While any cut agreed by Opec at its meeting in Vienna November 30 meeting could take effect as soon as December 1, traders say the biggest price impact will be in contracts for delivery in early 2017, especially the February contract, rather than in the spot market. "The reason why you’re not going to see any impact on Q4 2016 prices is because by November when this decision is made you are going to be trading January or February barrels," said Virendra Chauhan, analyst at trading consultancy Energy Aspects in Singapore. Even January data will be less affected as it expires on the day of the meeting, leaving February as the first contract that covers the meeting itself. Market data shows a steady inflow of new positions into the February contract lately, with positions (known as open interest...
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