Oil Prices Bounce
FinViz
Crude oil prices are all over the place as the members of OPEC gather in Vienna.
West Texas Intermediate crude prices were down as much as than 1.8% to below $74.50 in early afternoon trade on Tuesday, about $2 a barrel lower than they were just a few hours earlier.
Near 1:30 pm ET, WTI crude was near $74.65.
Prices have actually rebounded a bit off of their lows following a WSJ report that OPEC ministers were near an agreement on production cuts.
"OPEC members are inching toward a compromise that could lead them to cut oil supply, as the producer group prepares for one of its most closely watched meetings in years this week," WSJ's Benoit Faucon, Summer Said, and Sarah Kent reported.
"Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday’s meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position. Support for such a move, which would be based on tighter compliance with OPEC’s existing output limit as opposed to an outright cut to its production target, was coalescing last week at a meeting of OPEC advisers, according to several of those present."
Still, prices are trending lower.
The Drop
The initial price drop followed headlines crossing Reuters that said Venezuela, Russia, Mexico, and Saudi Arabia will "monitor" oil prices for a year, but did not agree to any output cut.
The headlines come after Venezuela said a meeting with Saudi Arabian oil minister Ali Al-Naimi did not result in the agreement for any output cut.
The parties agreed to meet again three months.
These headlines come just two days ahead of the latest OPEC meeting, which some in the market have expected would result in a production cut from the oil exporting cartel.
Mexico and Russia are not OPEC members.
And as Business Insider's Linette Lopez reports, this news is particularly bad news for Venezuela, which has seen inflation go through the roof and currency reserves fall to an all-time low.
The declining price of oil will provide no relief to the South American nation, and perhaps make the situation worse for Venezuela, as the country needs oil to be around $85 a barrel in order to pay for imports and keep up with debt payments.
Oil prices, which have slid more than 30% in the last several months, have been pressured by a global economic slowdown and a glut in supply, and many expected OPEC to announce an agreement on some sort of production cut to curb price declines.
In recent days, oil prices had rallied a bit, with WTI moving from about $73.50 a nearly $77 a barrel, before resuming their decline on Tuesday.
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