OPEC+ says they can get oil to $60 bbl with 1 mm bbl/d cut. How, when by most accounts China's demand alone down 4 mm bbl/d ? The OPEC Smoke & Mirrors. It works ?

[BLA + 1,666]

OPEC playing same old games (1) will say recommend 600k or 1 million cut and then SURPRISE ! It's  1.2 mm bbls cut.  OMG ! (2) Then as always Russia won't publicly commit . . . . then Russia announces THEY'RE  IN ! OMG !

Russia playing hard to get just like they did last December.  OPEC had to let Russia exclude condensate as oil.  Instantly decreased production by 1.4 mm bbls/day and in compliance. Russia has never complied with production cuts.  All lip service. 

Have to hand it to them it works.

Still haven't heard any data that shows with any reasonable certainty how long or how devastating Coronavirus will be.

Nobody knows.  

Does anybody truly believe a 1.2 mm bbl cut comes anywhere near what is needed to address the virus and associated economic slowdown ?  

Saudis already cut production 500k bbls.  Running out of storage.

By the way OPEC and Russian production increased both January and February. 

Don't comply now , never have.

Edited March 7, 2020 by BLA

[Douglas Buckland + 6,308]

Hey! Globally (everyone) has been pumping oil into a supposedly oversupplied market for the past 5 years - why stop now?😂

[wrs + 893]

Lowest output since 2009 in February.  I would say that the oversupply argument is hot air.

https://www.hartenergy.com/news/opec-oil-output-drops-lowest-over-decade-186228

[El Nikko + 2,145]

Spring's around the corner, surely this virus will die off as it warms up, how many people catch flue and colds in spring and summer?

As far as I'm concered this economic slow down was always on the cards and is something I predicted several years ago, the virus panic is just the catalyst to tip everything over the edge. When you think about it recessions occure every 6-10 years so we were way overdue one.

If we are to believe the data coming from China the number of new cases is very low and 50k of the 90k have recovered. I'm still a bit doubtful this is as bad as the MSM is making out.

I also read that they expected factories in China to be back up and running fully by the end of March...or so they say.

[Old-Ruffneck + 1,177]

Quote

11 hours ago, Douglas Buckland said:

Hey! Globally (everyone) has been pumping oil into a supposedly oversupplied market for the past 5 years - why stop now?😂

 

Yup, I'd agree last few years and last 2 especially been oversupplying but China and Japan been putting a lot of the extra into a reserve. So it was sold but to storage. I can think of a few non-OPEC could offset that 1mbd if they chose too. Trying to scare the price up by cutting production and living beyond your means (KSA) and supporting an ever growing population on 1 commodity is foolish. So are the Sauds really our friends or just out for themselves? I think the latter, they need 80$ oil too sustain their Social programs and cash giveaways. I still remember pushing cars to the pump in the early 70's and have a long memory. Ever since that blip in time the Sauds had a different outlook towards the US. 

Kinda hard to tell at the moment what the demand in 30 days is going to be but I can't picture unless China slows down even more. A lot of tankers been turned around as China is full up at the moment. So them tankers need sell somewhere. How many tankers are drifting with loads? 

[Gerry Maddoux + 3,627]

^

Several very good points made above. The Chinese are "said to have built up" the second largest strategic reserve with something like 380 million barrels. When this virus clears out, the Chinese are going to have to really push hard to reestablish their place as parts-manufacturer and assembler. 

Interestingly, this little company (INO), an American company run by a guy named Kim, says they had developed a vaccine against the COVID-19 just three hours after they knew the genetic sequence from a Chinese publication. Kim told President Trump in the link I put on the Sneeze thread that they have plans to try the vaccine in China and S. Korea. Trump--true to form--suggested Seattle. Of course, we're more careful with our human trials, but this is a dire humanitarian crisis, so who knows.

The Saudis? They could care less about us, or anyone else other than themselves. The Bush Family was in bed with them--we needed the oil. The screw has turned and now the Saudis needs us more than we need them.

I think if everything were to get back to normal tomorrow, it'd take about three months to get back in balance. But then I think it would take only about another quarter for there to develop another imbalance: this one inadequate supply. 

[0R0 + 6,251]

11 hours ago, wrs said:

Lowest output since 2009 in February.  I would say that the oversupply argument is hot air.

https://www.hartenergy.com/news/opec-oil-output-drops-lowest-over-decade-186228

Which is why prices rebounded and stuck while stocks rebounded and then tanked again. Net of storage, there is a 4-6 mob/d over supply. That does not mean that whomever can will not take the floating delayed deliveries at a discount and store it as anyone can see that US additional production is not as big, and nobody else is raising production big time from here. So it is all a matter of filling storage and waiting for China to recover and everyone else to figure out their way out of their outbreaks. I don't believe anyone else is going to shut down whole regions and quarantine 780 mil people in their homes as China has. If there was an example of what not to do, China was it. 

There is just a tad of contango out on the WTI curve. Not indicating a huge oversupply at spot. 

If my "replace China" investment wave scenario proves out, then the current supply will not suffice and prices will rise at least moderately to the level that LNG displacement of diesel and new oil drilling will resume - somewhere in the $70 range for WTI