Early Oil Reaction To OPEC Cuts – Modest
Posted by zmann on October 5, 2006
After an initial $0.79 rally off Wednesday’s close, crude traded back through key pyschological support of $60 to $59.80 as the European markets prepared to open. I’d expect an initial jump as WS begins to assimilate the impact of these cuts (sources now are saying 4%, not the 8% I quoted earlier- I guess they have more recent data than the EIA July figures which is how I calculated my number). Anyway, I’m betting the lack of support from Saudi Arabia will temper the rally although I know there will be a pump as Europe closes. Look for further downside in natural gas price action with any injection over 65 Bcf. Will find and post consensus tomorrow but I’m guessing I’m close to the street’s range.