Crude Oil has been trading in a range in the last two weeks. In October, crude Oil turned bullish, after comments from OPEC members that they might decide to cut production again. As a result, WTI crude climbed from $51 up to $58 during last month.

Although, today crude Oil has been slipping lower. OPEC’s secretary general, Mohammed Barkindo made a few comments this morning, which points down for crude Oil. Below are Barkindo’s remarks:

• Too early to say if there is a need for further output cuts
• Premature to discuss OPEC+ decision in December
• OPEC still to hold five technical meetings before December meeting in Vienna
• OPEC is following progress in US-China trade talks closely

So, now OPEC members are not so sure that they want to cut production further. Remember that they already have production quotas in place and most OPEC+ countries are heavily dependent on Oil revenue, so they are not too keen on cutting production further.

Although, their hopes lie in the US-China trade deal. The “Phase One” deal is close to being signed, which would improve the sentiment for risk assets such as crude Oil. Hence the shift in OPEC’s tone. But, it seems that they will be waiting for the “Phase One” deal to be signed, which might be postponed for December. So, OPEC will likely take the decision after the deal is signed. Crude Oil should be trading sideways until then I suppose.

Barkindo Made some more comments a while ago which are sending crude oil surging higher. He is of the idea that US shale production will decline next year, which will help Oil prices recuperate. This lowers odds of OPEC cutting production on December, but it’s a positive assumption for Oil prices.,hence the jump. Below are the afternoon comments:

• Likely C# downward revisions of supply going into 2020 especially from United States shale output
• Fundamentally global economy range strong
• There is no sign of global economic recession
• Demand numbers for 2020 has potential for an upside swing
• Confident OPEC+ members will continue with their agreement in 2020
• Some US oil companies see shale output growth in 2020 only up by around 300,000-400,000 BPD. That it is not as High as OPEC optimistic estimates
• Saudi authorities have reassured US that Aramco IPO won’t affect kingdom’s role within OPEC as the biggest producer
• No one in OPEC+ wants to return to where we came from during oil prices downturn
• The Aramco IPO won’t affect Saudi Arabia’s participation in supply adjustments to ensure oil market stability