Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing nations at a meeting on Sunday reached a tentative agreement to prolong production cuts until the year’s end, the Wall Street Journal reported, citing delegates. Delegates reportedly indicated that OPEC+ outlined a plan to extend significant oil supply reductions into the latter half of the year amid efforts to prevent a global surplus and stabilize prices. The decision coincides with Saudi Arabia’s initiation of a substantial share sale for its national oil giant, Aramco, generating substantial funds for the country’s economic overhaul.
OPEC+ Has Outline of Deal to Extend Cuts
- OPEC+ ministers are gathering to discuss oil production policy
- They already have the outline of a deal to extend “voluntary” supply cuts into the second half, delegates said
- Talks continue on extending separate, group-wide curbs into 2025
One factor that could provoke OPEC+ to unveil a surprise today is the recent buildup in short positions in crude futures markets. Earlier this month, speculative Brent shorts held by hedge funds and other managers reached the highest level since the depths of the pandemic in late 2020.
It’s the kind of level that’s triggered a reaction in the past from the Saudis: Energy Minister Prince Abdulaziz bin Salman once threatened to leave bearish traders “ouching like hell.”
Nigeria successfully negotiated an increase in its output target to 1.5 million barrels a day for this year. That’s up from the 1.38 million originally allocated to the country based on an initial assessment of its production capacity. It looks like those third-party assessments might have been right after all, with the nation falling further behind its new target each month.
There’ll be a lot of attention on overseas participation after global funds largely balked at the valuation expectation during the company’s mega IPO in 2019. That left the Saudi government mostly reliant on local money.
Here’s a look at how the output cuts have been shared among OPEC+ members:
Kremlin official threatens war against NATO if Ukraine uses US weapons against Russia
The dramatic policy shift follows the Kremlin’s assault on the city of Kharkiv and a chorus of pressure from European allies.
The decision draws Biden even deeper into a war where Russian President Vladimir Putin has repeatedly raised the prospect of a nuclear strike, a concern for a U.S. leader who matured amid the U.S.-Soviet nuclear confrontations of the 1960s.
Biden has been cautious about escalation — but also mindful that the Ukrainians have repeatedly been granted greater capabilities and faced down a Kremlin that did little in response. A growing number of the United States’ European allies in recent days also had urged the administration to lift its opposition, signaling an intent to allow their own weapons to be used against military targets on Russian soil. Although Ukraine has used some European arms as well as their own to fight back, Washington’s say-so has been the most important because of the quantity and the quality of its equipment. NN: This bears watching. It a major esculation that i do not believe the Biden administration has though through
Key Oil Ministers Head to Riyadh as OPEC+ Plans Change Again
Major OPEC+ producers will gather in Riyadh this weekend to debate oil output cuts after the Saudi-led group revised its meeting plans for a second time. Top officials from Kazakhstan, Russia, the United Arab Emirates and Kuwait are among those due to convene in the Saudi capital on Sunday, according to officials. They’ll discuss prolonging supply curbs to the end of this year — and potentially into 2025, said delegates, asking not to be named because the information was private. The Organization of Petroleum Exporting Countries and its partners had originally scheduled the June 2 meeting at its headquarters in Vienna, but a week ago shifted the conference online. The sessions held by the 22-nation group will still be held virtually, OPEC’s secretariat said on Friday. The fluctuating plans add intrigue to a meeting that had been widely expected to ratify existing production policy, extending output cuts at their current levels. All of the countries so far confirmed to be going to Riyadh are making roughly 2 million barrels-a-day of extra production cuts — in addition to group-wide supply curbs — that currently expire at the end of this quarter. Saudi Arabia, Algeria, Iraq and Oman are also participating in these so-called “voluntary” supply reductions. Kazakhstan confirmed earlier on Friday that its Energy Minister, Almasadam Satkaliyev, will join the meeting in the Saudi capital. On the same day as the OPEC+ meeting, Riyadh plans to sell more shares in state oil company Saudi Aramco, a move that could raise as much as 44.8 billion Saudi riyals ($12 billion). The deal will test global investors’ appetite for the world’s biggest oil exporter, and could add further incentive for supporting oil markets.
Houthis say they targeted US vessels
The Yemeni militant group Houthis said they launched a second attack on USS Dwight D. Eisenhower, a United States aircraft carrier, north of the Red Sea. They also claimed they targeted a US destroyer and three other vessels. A Houthi spokesperson said the Eisenhower was attacked with “a number of missiles and drones.” There are no reports of casualties or damage.
US upset by Israel’s response to Biden’s publicity stunt
The White House expressed disappointment with the initial response of Israeli Minister without Portfolio Benny Gantz to United States President Joe Biden’s proposed hostage deal, Walla News reported, citing a US official. Gantz and Defense Minister Yoav Gallant were briefed before the speech, though details of Gantz’s reaction remained undisclosed. Washington is also said to be disappointed by Gantz’s lack of a public statement regarding Biden’s remarks.
Trump: I am political prisoner of falling nation
Former United States President Donald Trump took to Truth Social again to comment on him being found guilty on 34 counts of first-degree falsifying business records by claiming he is “a political prisoner of a falling nation.” “But I will soon be free, November 5th, and Make America Great Again!” he added in capital letters. Trump previously said he will appeal the verdict.
Trump’s team says he raised $52.8M since verdict
The team leading former United States President Donald Trump’s 2024 campaign claimed he raised $52.8 million since the former head of state was found guilty on 34 counts of first-degree falsifying business records. In the posts on social media, the campaign dismissed the trial as President Joe “Biden’s sham trial.” Meanwhile, Trump insisted he will appeal the verdict.
Biden urges Hamas to accept Israel’s ceasefire deal……….Netanyahu: Ceasefire tied to Hamas dismantling
United States President Joe Biden urged Hamas to accept Israel’s proposal for a new ceasefire deal. “Now is the time to raise your voices and demand that Hamas comes to the table, agrees to this deal, and ends this war that they began,” Biden wrote on X, formerly known as Twitter. Previously, Biden confirmed that Israel proposed a ceasefire deal that would last six weeks. United States Secretary of State Antony Blinken and Turkish Foreign Minister Hakan Fidan had a telephone call during which they discussed Israel’s proposal for a new ceasefire agreement with Hamas. “They discussed the deal’s extensive benefits for the people of Gaza, including a massive influx of humanitarian assistance, the return of Palestinians to North Gaza, and the beginning of the reconstruction of Gaza. The Secretary underscored that the proposal is in the interests of both Israelis and Palestinians,” the State Department’s statement read.
The document noted that Blinken underscored that Hamas “should accept the deal and that every country with a relationship with Hamas should press it to do so without delay.”
Netanyahu: Ceasefire tied to Hamas dismantling
Israeli Prime Minister Benjamin Netanyahu emphasized that a permanent ceasefire in Gaza hinges on the dismantling of Hamas’s military and governance structures. This statement followed US President Joe Biden’s acknowledgment of Israel’s proposed three-phase ceasefire deal, contingent on Hamas releasing hostages. “Israel’s conditions for ending the war have not changed,” Netanyahu said. NN: Their is no peace deal. See BlackMask Market News and Commentary:
Not So Fast
US Says Israel Proposes Cease-Fire in ‘Decisive Moment’ For War
- Biden’s three-part plan for cease-fire, hostage release
- First, a six-week “full and complete ceasefire” including “withdrawal of Israeli forces from all populated areas of Gaza, the release of a number of hostages including women, the elderly, [and] the wounded” and the release of “hundreds of Palestinian prisoners” by Israel.
- The second phase would commence after further negotiations between Israel and Hamas. Biden stressed that the ceasefire would continue past the six-week first phase, if negotiations continue apace.
- The third phase would consist of a “major reconstruction plan” for Gaza along with the return of any remains of hostages who have died since being taken captive during the October 7 attacks.
The US said Israel has put forward a fresh Gaza cease-fire proposal that would pause fighting with Hamas for at least six weeks, a move described by President Joe Biden as a “decisive moment” in the conflict after several failed attempts at peace. Biden said Hamas had been degraded to the point it could no longer carry out an attack like the one that started the war on Oct. 7. Detailing the proposal from the White House on Friday afternoon, he urged all parties to accept the deal. “Hamas says it wants a cease-fire,” Biden said. “Hamas needs to take the deal” and by doing so prove that they are really serious about wanting to end the war, he added. Hamas, designated a terrorist organization by the US and European Union, has said it’s ready “to deal positively and constructively with any proposal” based on an indefinite stop to the conflict. It called for a complete Israeli withdrawal from Gaza, the return of displaced people to their homes, and “the completion of a serious prisoner exchange deal” if Israel “declares its explicit commitment to that.” Israel and Hamas have continued back-and-forth negotiations via Qatari and Egyptian mediators throughout the nearly eight-month war that’s convulsed the Middle East and devastated the Gaza Strip. The two sides have been unable to reach an agreement to pause the fighting since late last year – including recently, when negotiators appeared close to striking an understanding, only for talks to fall apart. Friday’s developments, however, appeared to show fresh openness toward a deal, with Hamas saying it “views positively” what Biden laid out in Friday’s White House speech, particularly “his call for a permanent cease-fire.” US Secretary of State Antony Blinken spoke separately by phone about the proposal with his counterparts in Jordan, Saudi Arabia, and Turkey, all countries key to longer-term regional stability. Biden sought to frame the four-and-a-half page proposal as a precursor to an enduring peace. The progress came even as Israel’s military ratcheted up operations in the southern Gaza city of Rafah in recent days, defying world leaders who’ve called for a halt to the violence. The latest offer is almost identical to a cease-fire plan Hamas presented several weeks ago, according to a senior US official who briefed reporters after Biden spoke. The official, who requested anonymity to describe internal thinking, added that Hamas has privately been more open to a deal than its public statements would suggest.
The first phase would last for six weeks and see Israel withdraw from all populated areas of Gaza. Hamas would release some hostages and the bodies of some of those killed in captivity, while Israel would return some Palestinian prisoners.
The second phase would see the exchange of all remaining living hostages and the removal of Israeli troops from Gaza.
And a third phase that would see a major reconstruction plan commence.
Biden addressed tensions within Netanyahu’s government, which relies on the support of right-wing parties, saying that Israel risks draining its resources and becoming further isolated internationally the longer the war goes on. “The people of Israel should know they can make this offer without any further risk to their security,” Biden said. “I know there are those in Israel who will not agree with this plan.
But on Saturday, Netanyahu was adamant in declaring that for Israel’s war on Gaza to end, Hamas must be destroyed.
“Israel’s conditions for ending the war have not changed: the destruction of Hamas’s military and governing capabilities, the freeing of all hostages and ensuring that Gaza no longer poses a threat to Israel,” his office said in a statement. It said those conditions must be met, “before a permanent ceasefire is put in place”.
“The notion that Israel will agree to a permanent ceasefire before these conditions are fulfilled is a non-starter,” it added.
Abdullah al-Arian, professor of history at Georgetown University in Qatar, pointed out a “major contradiction” in the demand, with both Israel and its staunch ally the US saying they do not want a future in Gaza in which Hamas has any kind of political role left. “At the same time, this is an agreement that would have to be reached through negotiations with Hamas, so, how do you do that? How do you eliminate them as a political force and at the same time reach a negotiated solution that is agreed upon by all parties,” he told Al Jazeera.
NN: BlackMask Market News and Commentary Titled:
not so fast
Fed’s Favored Inflation Gauge Cools, Spending Unexpectedly Drops
- Core PCE price index rose 0.2% in April, smallest gain of year
- Inflation-adjusted spending fell, restrained by tepid services
The Federal Reserve’s preferred measure of underlying US inflation moderated in April and consumers dialed back their spending, supporting plans for an eventual reduction in interest rates. The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 0.2% from the prior month. That marked the smallest advance of the year, according to Bureau of Economic Analysis data out Friday. Inflation-adjusted consumer spending unexpectedly fell 0.1%, dragged down by a decrease in outlays for goods and softer services spending. Wage growth, the primary fuel for demand, moderated. The report offers Fed officials some solace about the pathway for inflation after progress on price pressures was interrupted in the first quarter. At the same time, the April spending figures add to evidence that the year is off to a slow start for the economy.
| Metric | Actual | Estimate |
|---|---|---|
| PCE price index (MoM) | +0.3% | +0.3% |
| Core PCE price index (MoM) | +0.2% | +0.2% |
| PCE price index (YoY) | +2.7% | +2.7% |
| Core PCE price index (YoY) | +2.8% | +2.8% |
| Real consumer spending (MoM) | -0.1% | +0.1% |
Central bankers pay close attention to services inflation excluding housing and energy, which tends to be more sticky. That metric climbed 0.3% after rising 0.4% in March, according to the BEA. Meanwhile household demand, while fueled by steady job and income growth, is showing signs of cooling. The BEA’s report showed inflation-adjusted outlays for services rose 0.1%, the smallest gain since August. Spending on merchandise decreased 0.4% last month .Goods outlays were restrained by declines in gasoline and vehicle purchases. While health care spending supported outlays for services, other categories such as restaurant meals, recreation and transportation decreased during the month. Looking ahead, with household debt hitting a record, consumer confidence generally trending lower and interest rates at a two-decade high, it remains to be seen to what extent consumers will continue powering the economy. A report out Thursday showed the US economy grew at a slower pace in the first quarter than initially reported, in part because consumer spending was marked down on weaker demand for goods — particularly motor vehicles.