NEW YORK, Sept 27 (Reuters) - Oil fell about 3 percent on Tuesday afterSaudi Arabia and Iran dashed market hopes that the two major OPEC producers would find a compromise this week at meeting in Algiers to help ease a global glut of crude.

Saudi Energy Minister Khalid al-Falih told reporters in the Algerian capital, where OPEC and other oil producers gathered for the Sept. 26-28 International Energy Forum, he did not expect an agreement to come out of the consultations on the last day of the meet.

He also said he did not think there was a need to significantly adjust or cut supply and that Iran, Libya and Nigeria should be allowed to produce at maximum levels seen in recent history.

http://www.downstreamtoday.com/news/article.aspx?a_id=53668

Oil is in contango, eventually it will go up, the futures are proof of that.

Voila, OPEC move its lips and oil is up by 6%.

 

Not for long. Just a reaction to the news.

Once people realize that the oil pumped during the proposed "freeze" is still greater than global daily consumption and that there is so much oil already out of the ground that storage is still a problem, then price will stabilize between $40 to $50 a barrel for the foreseeable future. i.e. no change from the present.

34 minutes ago, KarenBravo said:

Not for long. Just a reaction to the news.

Once people realize that the oil pumped during the proposed "freeze" is still greater than global daily consumption and that there is so much oil already out of the ground that storage is still a problem, then price will stabilize between $40 to $50 a barrel for the foreseeable future. i.e. no change from the present.

 

We need to get past the current contango situation and back to normal oil futures (http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html)

 

Inventories in oil storage is at a historical high, because future prices are higher, hence they are making money just by storing oil.

3 hours ago, KarenBravo said:

Not for long. Just a reaction to the news.

Once people realize that the oil pumped during the proposed "freeze" is still greater than global daily consumption and that there is so much oil already out of the ground that storage is still a problem, then price will stabilize between $40 to $50 a barrel for the foreseeable future. i.e. no change from the present.

 

Let's see how the Saudis choose to retaliate for the 9/11 bill.  It could get interesting.  Last time they got pissed off at the USA, oil tripled.  Of course, that was a long time ago.