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Hansen: Speculation over Saudi/Russia deal continues to drive oil

Will Saudi Arabia and Russia really agree to cut oil production? That’s been the main market driver this week. Saxo's Ole Hansen says deal or no deal, it indicates that two of the world's biggest oil producers have hit their pain threshold in terms of how low oil prices can go.

The speculation has been enough to push the market up 25% from the lows. If there is a production cut of around 5% that would remove up to one million barrels of oil a day from the market which Hansen says could see the market stabilise up to USD40-45.

But this week US inventories were up again - the highest in nearly 85 years. There was a silver lining though, says Ole, in that overall US production has seen a slight drop.

He also discusses who the investment winners and losers are this week. And he looks at energy stocks and how they too have benefited this week.

03:25 minutes
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