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The -- of all the trauma in Europe major story coming out of the Middle East OPEC countries met today.
And kept the oil production limit.
Exactly where -- was 38 million barrels per day of output but it's what's happening between OPEC members behind closed doors.
That could in the future really move prices always gonna have forward here Fox Business Stephen short is the editor of the -- report.
Tim Evans is the energy futures analyst at Citigroup all right let's get the view at 30000 feet Stephen -- you know -- stop sought rally in oil prices today.
I would've thought that keeping output where it is which is so much considering we have huge amounts of supply would have been bearish for prices but it was not.
Why at this point -- is OPEC really had no choice but to keep the production quota unchanged.
If you raise the production quota then you send a clear signal to the market.
That -- unwilling to address the current overproduction in the market.
In if you cut production and prices do you go up then you insert yourself into the US presidential election -- OPEC certainly does not want that.
So the key takeaways from this report are OPEC is generally concerned about further global economic contraction.
And more importantly the powers that be within the producer group IDE Saudi Arabia.
Wants to keep the pressure up on -- -- with regard to their nuclear ambitions well.
There you go to -- I mean you talk about what's happening behind closed doors Saudi Arabia has a different.
Mission statement they're looking at real concerns about Iran but we also have Venezuela but teaming up with Iran do we not with a different motive.
Well yes in general things tend to break down between.
Saudi Arabia which takes the long view.
And -- is looking out for their customers interest.
In a fair value for will prices.
They also don't want to give their competitors too much revenue to reinvest in the business and raise output.
Because that means over the longer term Saudi Arabia will lose market share and lose market influence.
And then you have other members such as there were on -- in Iraq.
And Venezuela and a few with the others who or more short term -- oriented they wanna see their revenues now.
And so they -- -- argue that Saudi Arabia should cut back to support a higher.
Will -- well then here comes the big question who wins this battle and where do prices go from here Stephen I'll start with Tijuana.
How Saudi Arabia won't win the battle no doubt they've got the long term view as -- Certainly has pointed out.
At this point we're looking at the global price -- -- the OPEC price of oil.
In the high ninety's at this point we are coming out of refinery turnaround season so demand for crude oil is picking up -- as we begin to manufacture more gasoline.
So I at this point and at this point I expect prices to -- find support.
And move higher as we go out throughout the summer that Tim what do you think.
Well I'd agree with that.
Upward price by -- third quarter and fourth quarter global petroleum demand is stronger.
-- the second quarter which is usually the weakest quarter of the year.
So that stronger physical demand is going to help support the you will price I also expect overall.
OPEC production to drift lower.
Over the balance of the year or so that we don't have this ongoing surplus rising inventories and continuing downward pressure.
Let me get your -- outlook on on the price of oil let's say by September and I know that's a very short term just a couple of months but.
Tim first what do you think this go higher -- we get back to a 108 dollars a barrel which is what we saw just a month or two ago.
I I think there's potential for prices to move moderately higher but -- look for.
Ended the third quarter may be.
Five to ten dollars up from where we are now.
Not a lot more of upside potential in -- we start to see some real geopolitical.
Threats to supply Steven.
Indeed now we will keep in mind back in February when the global price of oil was approaching a 130 dollars a barrel just how unrealistic that price was.
We are -- into an area where prices are competitive at this point right around 100 dollars 95 dollars.
You know what the saudis and the other oil producing countries they can make a nice living out of that.
And more importantly consumers in the west could also go in and potentially grow on the economy.
-- certainly I think -- Floor is in our very close to block bottom here that would not X I would expect that at least the five if not ten dollar raise in price towards as you said as you go into September.
-- it will go with the consensus here the median of about five dollars thank you both so much Steven shore and Tim Evans of -- --