Last week WTI crude managed to stay above $40/barrel, appreciating 6% over the course of the week.
- The number of active oil drilling platforms in the U.S., as published by Baker Hughes, fell once again. The weekly indicator dropped by 9, to 555. This additional decline suggests that oil output will fall south of the border.
- On December 4 the members of OPEC will announce their decision on production quotas, but no change is expected in the current policy. It should be noted that the cartel has been producing over 32 million barrels/day compared to an official quota of 30 million bpd. We are also curious to see whether the members will be able to find a way to exercise more control over price volatility. OPEC meets in Vienna, and its press conference is scheduled for 10:00 am Eastern time.
- Friday is also the day that the latest U.S. employment figures will be released. If more than 200K jobs were created in November, the greenback can be expected to rise, driving up the cost of fuel priced in Canadian dollars.
- The price of diesel in New York, expressed in CAD, is $0.48/liter, the lowest level seen in 2015. This represents a good opportunity to review your hedging strategy for 2016 and lock in your supplies for the upcoming year.
Have a good week!
Philippe Shebib