Oil just had its worst month in a decade, and its next move may depend on Saudi Arabia and Trump
Last month was crude oil’s worst in a decade, battered by supply concerns and global politics.
West Texas Intermediate, or U.S. crude, lost 21 percent in November, tumbling to its lowest level in a year and logging its worst performance since October 2008.
After sinking below $50, the days ahead could bring some relief, according to Helima Croft, global head of commodity strategy at RBC Capital Markets. This week, the cartel of oil producing nations known as OPEC will make a decision on future levels of production that may determine where prices head in the near term.
“What we really need to get on the path to $60 is we need to see a substantial cut coming out of OPEC… at the Thursday meeting,” Croft told CNBC’s “Futures Now” on Thursday. “We anticipate that OPEC will pull a significant quantity of barrels, at a minimum a million barrels.”
OPEC, which includes top producer Saudi Arabia, is set to meet in Vienna on Thursday. Along with non-OPEC member Russia, oil producing countries are expected to agree to a supply cut to counteract tumbling oil prices.
“The one cloud over this is really Saudi Arabia and their relationship with President Trump,” added Croft. “President Trump has made the explicit ask to Saudi Arabia to keep the taps open, so at the eleventh hour that they potentially try to force the Saudi crown prince to keep the barrels on the market,” she said. “I think that’s the big concern.”