- Saudi Arabia, on Monday morning, announced that it is extending its voluntary 1 million bpd production cut through August.
- OPEC and Saudi Arabia are preparing the ground for future oil price-supportive cuts in production when Asian demand growth disappoints.
- OPEC and Saudi Arabia want oil prices much higher than they are now but know that the U.S. and its key allies in the West and the East want the opposite.
- Total OPEC+ production cuts over5.36 MBPD
OPEC last week underlined that Asia’s continued strong economic growth would account for virtually all the growth in demand for oil this year. Saudi Aramco added that China and India will drive oil demand growth of more than 2 million barrels per day (bpd) in the period. Just prior to these two comments, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said that OPEC and its allies are in “a state of readiness” amid a divergence between the physical and futures oil markets. These actions, he added, would be “precautionary […,] part and parcel of what we call being proactive and pre-emptive.” For oil trading insiders what these comments add up to is
OPEC, and its de facto leader Saudi Arabia, setting the stage for further major ad hoc cuts in their oil production aimed at pushing oil prices much higher.
The traders didn’t have to wait long. Saudi Arabia, on Monday morning, announced that it was extending its voluntary 1 million bpd production cut through August, sending oil prices rising by 1%. Oil prices are up over $6.00 from their May lows bases WTI. The market is in breakout mode with WTI trading over the key $71.00 bench mark. And BRENT trading over 75.00 a barrel. NN BlackMask Po Cast:
OPEC+ SAUDI FIREWORKS