The Organization of the Petroleum Exporting Countries is meeting this weekend in Algeria to set petroleum production policy.
The cartel, which controls almost 60 percent of the world’s oil exports, has historically worked to create stable, and generally higher, prices. This meeting, however, was expected to focus on increasing production to slow the sharply rising oil market.
Prices have been rising ahead of U.S. economic sanctions against major oil producer Iran, which are expected to reduce production from that nation by almost 25 percent.
While the United States is not a member of OPEC, President Trump has made clear his expectations for the meeting in a tweet Thursday: “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!”
As of midday Friday, November crude oil traded for $70.30 per barrel, near a two-month high.
Soybean hopes, fears
Soybean prices sank near a 10-year low this past week, trading Tuesday for a mere $8.13 per bushel.
A record-breaking soybean crop and low foreign demand due to ongoing trade disputes are stifling the market.
However, when a market is severely depressed, it doesn’t take much good news to spark a turnaround, which happened.
News out of Argentina gave the market a boost as there is talk it will increase export taxes on grain, which will make Argentinian corn, wheat, and soybeans more expensive on the global market. Argentina is a major competitor for U.S. farmers trying to sell abroad, so higher Argentinian prices should raise demand for U.S. farm products.
Furthermore, foreign buyers that usually buy South American soybeans are finding that U.S. beans are cheaper due to the Chinese tariff dispute, which is creating more demand from buyers like the European Union, Egypt, and Indonesia.
Finally, there are rising concerns that frost could hit the Upper Midwest by the end of September. For late-planted corn and soybeans that haven’t reached full maturity, freezing temperatures could damage plants, giving bargain hunters another reason to buy.
These factors helped prices rise by nearly 5 percent to trade as high as $8.55, the highest price since late August. However, the market will need more than hope or rumors to gain solid ground, likely depending on trade resolutions.
This article provided by NewsEdge.