Monday, August 22, 2016
Oil is getting crushed
Oil prices are diving Monday morning in response to a downbeat note from Morgan Stanley.
UK Brent was down 2.83% to $49.44 a barrel as of 1 p.m. BST (8 a.m. ET):
Crude oil was down 2.67% to $47.80:
The price of the black stuff is responding to a downbeat note from Morgan Stanley quashing hopes of a production freeze from the OPEC cartel of oil producers.
Oil had been rallying throughout August, climbing from $41.51 a barrel on August 2 to over $50 a barrel in recent weeks. It was buoyed by comments from Russia and Saudi Arabia hinting that they could freeze or cap production. Russia's oil minister, Alexander Novak, told a Saudi newspaper the two countries would "put in place joint measures to achieve oil market stability."
But Adam Longson, the head of energy commodity research at Morgan Stanley, said in a recent note that he saw "meaningful OPEC production agreement as highly unlikely," suggesting that there were simply "too many headwinds and logistical challenges to a meaningful deal." (You can read more on that note here.)