Crude Oil: The obvious major news comes from Vienna. OPEC+ agreed, despite a lot of jockeying, to cut 1.2 mb/d of supply beginning in January. OPEC will contribute 800,000 bpd and non-OPEC will cut by 400,000 bpd. The group met on Thursday but cancelled a press conference, raising doubts about the ability to reach an agreement. Iran held up the talks early Friday because it refused to accept limits on its production, although, to be sure, any limit would be symbolic anyway since its output is declining due to sanctions. Iran was exempted from the deal. Oil sank on Thursday and in early trading on Friday, but prices spiked by more than 4 percent when an agreement was announced.
The U.S. has on multiple occasions considered slapping painful sanctions on Venezuela, and the downturn in oil prices has opened up another opportunity to do so. S&P Global Platts reports that “hawkish White House officials are urging” Trump to target Venezuela’s PDVSA over human rights violations. “If the White House were to pressure Caracas to block a new constitution, we would not expect to pull many punches,” ClearView Energy Partners said in a recent note to clients.
|
