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>> Might Saudi Arabia be having a change of heart in oil strategy? Crude prices holding steady on Friday after a big jump the day before. That move came after the Saudi oil minister said he was willing to help rebalance the market. Traders took that as a hint that the Kingdom might ditch its policy of flooding the market with cheap oil in order to grab market share.
But Reuters commodities and energy columnist John Kemp says markets will probably just court on the hop.>> The market had become extremely bearish about the outlook for oil prices. Hedge funds had established a record short position in US benchmark crude prices over the last nine weeks, expecting them to continue declining.
That left the market very vulnerable to any piece of bullish good news, and this was a piece of bullish good news.>> US crude prices dropping back a little from $44 a barrel on Thursday All eyes now on September's meeting of major oil producers and consumers in Algeria.
Members of the OPEC cartel expected to hold talks on the sidelines, but US producers of shale oil could torpedo any agreement they might reach.>> The problem is that even if OPEC reached an agreement among its own members, there's no way to involve US shale producers in that.
So if OPEC decided to cut production, or even to simply implement a production freeze, I think shale producers wouldn't be bound by that. And clearly, shale producers might well step in to fill the gap.>> Iran also putting downward pressure on prices. It's busy raising oil output now that international sanctions have been lifted.
After a day of bullish sentiment on crude, it seems the bears could be taking charge again.