Commodities Thursday, Dec. 11, 1986 : Energy Futures Prices Gain
Energy futures prices made strong advances Thursday, signaling a belief that OPEC may be able to agree on significant production cuts. On some other markets, pork futures declined, Treasury bond futures were sharply lower and the grains and soybeans were lower.
Reports from the meeting in Geneva of the Organization of Petroleum Exporting Countries “had everybody buying†at the New York Mercantile Exchange, said Peter Beutel, an analyst in New York with Elders Futures Inc.
One unconfirmed report had Saudi Arabia possibly willing to accept across-the-board production cuts for all but the smallest OPEC members.
But the market may have over-reacted, said Beutel. “If you read between the lines, the statements from various OPEC members are not as sanguine deep down as on the surface,†he said. Beutel cited Iraq and the United Arab Emirates as members who are shying away from the idea of cutting production.
“There’s a good chance . . . that the meeting will produce an official price but not the level of production that would generate such a price,†Beutel said.
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