Making Sense

Brent Crude Oil Prices plummeted to $ 79.94 post the OPEC+ meeting after reaching as high as $84.51 in the session earlier and are trading lower in the Asian Session today. Meeting Highlights OPEC+ reached an agreement to deepen Oil production cuts. The total voluntary cuts for the Q1 total 2.184 mn bpd. Since the nature of cuts was voluntary, it was announced by each member state and not by the group as a whole. Country Cuts ('000) Algeria 51  Kazakhstan 82  Saudi Arabia 1,000  Russia 500  Oman 42  Iraq           211  Kuwait 135  UAE 163    Total 2,184  Brazil (the largest oil producer in Latin America since 2016) would join the OPEC+ group effective in January. Angola has rejected its quota .  What the market thought about announcement??? "this is a repackaging of previously agreed measures, with some uncertain extras".  "the concern is that a lar...

  "Volatility is a double-edged sword. It can cut you both ways." OPEC+ announced Production cuts of 1.15 mbpd on Sunday thus pushing crude oil prices higher in the Asian session. WTI prices touched a high of USD 86.44 per barrel. The sharp cuts in production follow the previously announced production cuts in Oct 2022 of 2 mbpd and Russia’s 0.50 mbpd voluntary reduction announced in February. The cuts announced will take effect from May and stay until Dec 2023. These actions are in sharp contrast to Global Oil Demand projections of a rise of over 2 mbpd by both the IEA and OPEC. Do the actions by the OPEC+ suggest a worsening oil demand outlook in the second of the year? Or is it just an acknowledge of OPEC+ running behind production quotas and adjusting global demand mildly. The sharp productions cuts only make the inflation fight worse. The Fed Fund Futures markets pushed out rate cuts with July pricing in 4.88% from previous 4.80%. The US yields also moved higher i...

Oil prices climb as OPEC+ members led by Saudi Arabia announced today a series of “voluntary” oil production cuts. Brent crude prices are up 1.60% at 79.73 and USDINR is expected to gap up at open closer to 82.32 levels. The Canadian dollar, beneficiary of higher oil prices gapped down at open at 1.3489 but has since found buyers in the Asian session to trade at 1.3507. The cuts will go into effect in May and remain in place until the end of 2023.   The following output cuts have been announced: 1.       Saudi Arabia 500,000 bpd 2.       The UAE 144,000 bpd 3.       Iraq 211,000 bpd 4.       Kuwait 128,000 bpd 5.       Algeria 48,000 bpd 6.       Oman 40,000 bpd 7.       Kazakhstan 78,000 bpd 8.       Gabon 8,000 bpd 9.       Moscow will extend its previo...