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OPEC’s Shenanigans

04 November 2016 by lberuti

The US presidential election is still currently the overriding theme in financial markets. Tension in that respect eased somewhat today as a few polls showed Mrs Clinton nudging back ahead of Mr Trump after a difficult week. That said, the market was distracted from the election risk reassessment by oil, which grabbed a few headlines after it reached a 5-week low. Domestic crude oil stockpiles surged by a record 14.4 million barrels in the week ending 28th October according to the US Energy Information Agency in a report they published yesterday. Hopes are fading fast that OPEC will be able to implement the tentative deal reached earlier in the year in Algiers to cut production and ease global oversupplies. As a result, WTI lost another 2% today, confirming Thursday’s close below $45. It is now down 15% over the last couple of weeks and its price action weighted on the energy sector, which was the underperformer of the session. It was particularly obvious among the CDXHY constituents, as shown by the above grapple.