Increased Volatility Ahead

OPEC’s agreement to curtail production in late November immediately boosted crude oil prices. Over the past months, both WTI and Brent have traded in a fairly narrow band - in the mid-$50’s. It appears that the original euphoria surrounding the OPEC agreement has given way to a divergence of opinion as to whether the production cuts will ultimately drain bloated global crude inventories and rebalance the market. As February draws to a close, speculation is already building as to the likelihood of an extension of OPEC’s six-month agreement.

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