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Credit Agricole: The Million barrel question – eFXnews

FXStreet (Barcelona) - The eFXnews team, note Credit Agricole sees the key issue for the OPEC meeting to be whether OPEC agrees to cut production to boost the price of Oil.

Key Quotes

“For many OPEC nations the price of oil is now below the cost of production, leading to a strain in fiscal accounts and economic loss.”

“The key issue for this meeting is whether OPEC agrees to cut production to boost the price of oil. Iran (who is talking with the Saudis) would like to cut production by as much as 1 million barrels a day. This is an extreme outcome and it is more likely that the members agree to a production cut of 400-500 thousand barrels a day.”

“A cut of these levels could help oil prices bounce back in the low 80s while a larger cut (in line with Iran’s proposal) could see oil prices surge back to the low 90s.”

“We remain medium term USD bull but the combination of a production cut and the surprise easing by China last week could increase the outlook for risk-sensitive currencies in the near-term, resulting in a mild pullback in the USD.”

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