The pledge of the Organisation of Petroleum Exporting Countries (Opec) to cut output may keep oil prices supported in the short term, but traders are eyeing US reaction to Iran’s recent missile test.
Analysts say traders will watch the stand-off between Iran and the US, after the US announced new sanctions on the Opec’s third-biggest member country following Iran’s recent missile test. In addition to Iran, traders will also keep an eye on rising US rig counts of shale oil, which has been on a gaining streak.
Weekly US rig count and inventories combined with news flow from the White House and progress with regards to the ongoing production cut will continue to set the agenda during February, said Ole Hansen, head of commodity strategy at Saxo Bank.
“We continue to see limited upside to crude oil at this stage with the downside risk primarily being led by the risk of a disorderly reduction of a bullish oil bet close to 1 billion barrels,” Hansen said.—Agencies