OPEC Opens Spigot
Saudi Arabia, the largest producer within the Organization of
Petroleum Producing Nations (OPEC) said it would crank up oil production if a
basket of oil it tracks does not fall below $25 a barrel. Energy prices gapped
sharply lower following the statement made late Monday. Although there is little
excess production capacity within OPEC, other leading producers within the group
also indicated a willingness to support the move. Crude oil is down more than
5%, but has retraced from its lowest levels of the session and natural gas has
gapped sharply lower and remains under pressure, probing new session lows.
Negative comments by a major brokerage house that the
semiconductor business is slowing down is weighing on stocks and index
futures.
Sugar was closed Monday, but is making a comeback after the
big down, outside day that initially spiked to a new high on Friday. Sugar is up
3% and is trading at the mid-point of Friday’s big down bar, a sign of a
repudiation of the negative tone of Friday’s action.