Some OPEC members have begun to discuss the potential for deeper oil production cuts, as oil prices have failed to recover this year despite the cartel’s best efforts to keep crude afloat.
Bloomberg first reported the discussions earlier today after speaking with some of the delegates involved in the meetings:
The OPEC delegates, who asked not to be identified because the talks were private, didn’t say that the discussions resulted in any kind of agreement to make deeper cuts. Earlier Monday, Saudi Arabia and Russia signaled they could be willing to extend production cuts into 2018, doubling down on an effort to eliminate a supply surplus just as its impact on prices wanes.
Late last year, OPEC reached a historic agreement to limit its total oil output in an attempt to put a floor under the oil markets. Crude oil has sharply declined over the past decade since hitting an all-time high over $147 per barrel of West Texas Intermediate (WTI) back in 2008. WTI was trading around $46 per barrel this afternoon.
Crude oil-linked ETFs are naturally feeling the heat of lower oil prices as well. The ProShares Ultra Bloomberg Crude Oil (NYSE:UCO) ETF was trading at $15.47 per share on Monday afternoon, down $0.15 (-0.96%). UCO is a double leveraged bull fund that seeks daily investment results double that of the Bloomberg WTI Crude Oil Subindex.
Year-to-date, UCO has now declined -33.78%, versus a 7.18% rise in the benchmark S&P 500 index during the same period.