Oil prices gained Monday as Saudi Arabia and Russia entered into an agreement to seek stabilization in the oil market. The two countries will work to seek output freezes, but speculators are skeptical of the market’s price gains.
The agreement, however, will likely help to promote more cohesive discussion when OPEC meets later in the month at the International Energy Forum in Algiers Sept. 26-28.
Oil prices gained but remained below the start of the week last Monday. To start the week WTI crude is trading at $45.17 per barrel and Brent crude is trading at $47.63. Last week WTI crude began the week at $46.97 per barrel and Brent crude began the week at $49.66.
The week’s leading reports on inventory and oil rigs had oil prices mostly lower before the agreement between Saudi Arabia and Russia. On Wednesday, the EIA’s petroleum status report showed oil inventories up 2.3 million barrels for the week. With the week’s gain, oil inventories increased to 525.9 million barrels which was 15.5% higher than a year ago.
The Baker Hughes Rig Count showed the number of oil rigs in North America at 634, a decrease of one from the previous week. Oil rigs in the U.S. increased by eight during the week and oil rigs in Canada decreased by nine.
Energy stock values continued to decrease during the Sept. 2 week. The Standard & Poor's 500 energy sector was down -0.49% led by the following:
- Murphy Oil Corp. (MUR, Financial) -7.93%.
- Marathon Oil Corp. (MRO, Financial) -6.48%.
- Apache Corp. (APA, Financial) -5.76%.
- ConocoPhillips (COP, Financial) -4.45%.
- Ensco PLC (ESV, Financial) -4.40%.
- National Oilwell (NOV, Financial) -4.31%.
- Baker Hughes Inc. (BHI, Financial) -4.10%.
A Bloomberg report on Monday provided some additional insight on oil and the outlook for prices.
Disclosure: I do not own any stocks included in this article.
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