$60 WTI By Year-End Now In Sight..........

With a number of positive data points and sentiment now shifting, it looks like WTI is now setting up to push $60 by year-end. Notably, it is widely expected that OPEC will maintain its current production cuts at the upcoming meeting on November 30th. Further, we are now seeing signs of slowing U.S. production with this weeks large decline in the U.S. rig count (down 11 rigs w/w). Accordingly, oil prices have maintained their recent gains and are showing signs of heading even higher, causing many analysts to now consider the possibility of a $60 price floor. Further, the fact that Brent has avoided a retracement back below $60 per barrel is good news for oil bulls.

Over the next few weeks, the driving force behind the oil price narrative will be OPEC's commentary prior to the November meeting. Notably, the flurry of comments in recent weeks from OPEC officials has steadily ratcheted up expectations for what they will agree to at their upcoming meeting in Vienna. The latest report from sources at OPEC suggests that the cartel is likely set to agree to an extension through the end of 2018 rather than just for three months beyond March. OPEC members have indicated that they would like to see commercial stocks reduced further. Interestingly, some officials have even struck a more bullish tone stating that OPEC members feel that $60 (a barrel) should be the floor for oil prices next year. Finally, geopolitical tensions around the world, most notably U.S. sanctions on Venezuela (which could see the county lose an additional 240,000 bpd in output next year), should help further shore up oil prices heading into year-end.