U.S. stocks opened lower on Thursday after the positive sentiment over a preliminary Algeria agreement on Wednesday between OPEC countries to lower its oils production over 2 percent dimmed on Thursday after some investors took profits and details of the possible coordination remains tenuous.
Following an OPEC meeting in Algeria on September 28th, the 14 member oil producing organization reported that it would lower its total oil production by 2 percent as of November while attempting to reach a more comprehensive production cut with non-OPEC countries such as Russia.
Details about the level of production targets from each OPEC member country still needs to worked out and determined later at a November 30th OPEC meeting.
During the September 28th oil meeting, largest OPEC member Saudi Arabia agreed to lower its production approximately 500,000 barrels a day while permitting other OPEC countries such as Iran, Libya, and Nigeria to increase its oil production.
Crude oil prices hit a 12 year low earlier this year and regional powers Iran and Saudi Arabia have mutual interest in stabilizing and lifting crude oil prices even though suspicion between these two rivals lingers and sanction free Iran seeks to return its oil production to pre-sanction levels.
U.S. oil production remains at high levels and other uncontrollable factors that drive the price of crude oil such as global demand remains at the whims of oil traders.
U.S. 2nd Quarter GDP-Third Estimate- Improves
The Commerce Department reported today that real GDP increased at a pace of 1.4 percent in the 2nd quarter of 2016, slightly higher than the 1.3 percent consensus estimate from briefing.com
The last 2nd estimate of 2nd quarter 2016 GDP showed an increase of 1.1 percent.
Today’s third estimate is based on more complete information and economic data.
According to the Commerce Department, the most significant change from the second to third estimate is that nonresidential fixed investment increased in the 2nd quarter after decreasing in the previous estimate.