So it appears the “floor” for West Texas Intermediate prices (at the moment) is $40, as evidenced by a January Fed survey by CNBC. Prices are currently roughly $5 above the January 28 low of $44.45 – a climb of approximately 10%. The price of Brent, on the other hand, is flirting with the $60 range – up more than 20% from its January 9 low of $46.59.
More than half of the 33 economists in CNBC’s report believe the widening differential is in response to excess supply. The United States crude inventories are at an all-time high and continue to climb even though the onshore rig count has dropped by 28% since the beginning of the year. But the decline is slowing: last week’s reduction consisted of 48 rigs, or 4% of the fleet.
The climb may not be enough to the members of OPEC, reports the Financial Times. Nigeria’s oil minister said on Monday that the cartel may stage an emergency meeting within the next six weeks. The cartel’s next official meeting is in June.
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