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With OPEC due to meet in September to discuss crude price stability, the price of both Brent and WTI has regained ground this week as a result of heightened expectations of a production freeze (or cut). Unfortunately, we have seen this before and skepticism will be high given that the Saudi’s have a habit of scuppering any plans to raise prices. We take a look at the state of crude ahead of that September meeting.
Crude prices have taken a turn lower over the past two months, as the rally that has dominated the start of 2016 begins to unwind. Much of this rally has taken place against a story of falling US production, with the continued squeeze from OPEC members finally leading to a decrease in investment. The chart below highlights this shift in production, with June 2015 marking the top for US output.