at the end of November at the Vienna meeting, OPEC members for the first time in 8 years to reach agreement to cut the market by surprise, bullish factors to stimulate the international oil prices in recent days continuous pulled. Among them, New York crude oil from the $45 / barrel rose to $52 / barrel, a record high since July 2015. Although OPEC will help ease the problem of excess supply of crude oil, but there are also concerns about the industry supply and demand pattern of its good painstakingly created will also benefit to recovery of shale oil, shale oil in the U. S., weaken the positive effect brought by OPEC, ultimately limiting the rise in oil prices space.

The dollar rate hike cycle has been formed

On Friday, the U.S. Department of labor released payrolls continued to show good momentum. Although 11 seasonally adjusted nonfarm payrolls increased by 178 thousand, lower than the expected increase of 175 thousand, but the latest statistics, the unemployment rate is only 4.6%, lower than the expected 4.9%, the lowest level since August 2007.

Due to the strong performance of the U.S. economy (a series of economic data released earlier, including inflation, manufacturing, market and consumer spending are good), almost certainly the Fed will raise interest rates in December. It is understood that the earlier Bloomberg statistics of the federal funds rate futures market implied probability of investors betting on December the Fed rate hike may be as high as 100%. most market participants generally expected, the Fed will be in the next week (Beijing time in December 13 – 15 days) the first rate hike at the FOMC meeting in progress during the year (- 0.75% to 0.50%). Although the dollar index appeared high pullback, but in the long term, the dollar rate hike cycle has been formed, the negative control on oil prices would not disappear.

It is difficult to achieve the desired effect of production

After months of debate, members of OPEC in week three output to reach an agreement, agreed that since the beginning of January 2017 will cut 1 million 200 thousand barrels a day to 32 million 500 thousand barrels, but the production rate is equivalent to only about 1% of the global output.

Specifically, OPEC’s largest oil producer Saudi Arabia agreed to spare, greatly reduce the production cut of 486 thousand barrels a day, down 10 million 60 thousand barrels, Iraq’s second largest oil producing countries also agreed to cut 210 thousand barrels a day, down 4 million 351 thousand barrels. In addition, non OPEC members Russia unexpectedly also agreed to cut output by 300 thousand barrels a day, contrary to market expectations. However, Iran is not in the production list, but was allowed to increase to 3 million 900 thousand barrels per day.