Crude Oil: OPEC+ agreed to cut production by an additional 500,000 bpd, with the cuts to last until March. But because the group is already producing below its current limit, there were questions about whether the “cuts” were in fact consequential. “If we were to have an outcome of an extension of cuts with only the official quota of the OPEC+ group being reviewed lower (the 500,000 bpd), rather than actual production, then the change in supply policy would be cosmetic (given below target production in some countries, notably Saudi Arabia and Angola),” said Harry Tchilinguirian, global oil strategist at BNP Paribas.
“We will continue the voluntary cut of 400,000” barrels a day, Energy Minister Prince Abdulaziz bin Salman said, sending oil prices much higher. With those cuts in hand and full compliance from other members – if it can be achieved – the cuts could end up being substantially deeper. |
