This is news?
From the WSJ:
“A weekend marathon of talks between major oil producers failed to finalize plans to implement an output cut, threatening the viability of an agreement reached last month to reduce production by as much as 2%.”
“Iraq and Iran’s insistence on exemptions emerged as a big sticking point Friday as those members refused to agree to cut their burgeoning output.”
Some skepticism is probably already built into the current price, but many expect the oil market to balance by the second half of last year even without an OPEC freeze or cut… I’ll be interested to see how the market reacts Sunday night…
There are also implications for options traders.. Implied vol for December options have actually been trading under January… December options expire before the November 30th meeting while January options will be still alive… An option seller might stay in December, while option buyers might move into January… Should the market react to OPEC’s failure to agree and prices collapse, the Dec/Jan vol spread could flip back to more normal levels with Dec over Jan…
The link is here: http://www.wsj.com/articles/opec-secretary-general-warns-against-delaying-production-cuts-1477748202
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