This week the three main forecasting agencies (EIA, IEA and OPEC) all released their forecasts for 2015. All three reports were relatively consistent with each other in that they all indicated that oil production is unprofitable and already starting to be cut and will likely continue to be cut as long as prices remain depressed.
While it appears that OPEC indeed is going to get a deal on a production cut already the markets are questioning whether it is going to be enough. The talk is that OPEC as a cartel is going to cut production by 1 million barrels a day at their next meeting.
U.S. crude production is at the highest level since 1986 and is on target to exceed 9 million barrels per day. Average price for Brent crude oil is expected to be about $18 a barrel lower next year than previously forecast."
Today oil will take its cue from the dollar. The dollar will move on the European Central Bank Statement that is due. With Japan going quantitative easing crazy, can the European central bank keep pace?
We all know that the unemployment situation report that comes out on the first Friday of every month is the most important economic report for creating volatile swings in markets. There are some doubts about the validity of some reports produced by the government.