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OPEC Extends Oil Cut To Prop Up Prices As Economy Weakens

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OPEC agreed on Monday to extend oil supply cuts until March 2020, three OPEC sources said, as the group’s members overcame their differences in order to prop up the price of crude amid a weakening global economy and soaring U.S. production. The move will likely anger U.S. President Donald Trump, who has demanded OPEC leader Saudi Arabia supply more oil and help reduce prices at the pump if Riyadh wants U.S. military support in its standoff with arch-rival Iran. Benchmark Brent crude LCOc1 has climbed more than 25% so far this year after the White House tightened sanctions on OPEC members Venezuela and Iran, slashing their oil exports. OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has overtaken Russia and Saudi Arabia as the world’s top producer.

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Greed and bloody money...

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Everything was clear two days ago, no surprise: 


 " Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020."

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Of course - immediately oil jumps

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6 minutes ago, 50 shades of black said:

Everything was clear two days ago, no surprise: 


 " Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020."

There are two words and one meaning: power and greed. Or, corporate greed.

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They choose "the right moment": supply cut as Middle East tension boil... 

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12 minutes ago, francoba said:

Of course - immediately oil jumps

Another good reason to buy a EV's....

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5 minutes ago, pinto said:

They choose "the right moment": supply cut as Middle East tension boil... 

Should we thank them!!!? 
 

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Iran will not block OPEC/non-OPEC oil cut extension, but will veto charter

Iran's oil minister on Monday said he will veto OPEC's long-mooted charter intended to formalize its oil market coordination with Russia and nine other non-OPEC partners, if it comes up during the producer bloc's meeting later Monday.

"The item of agenda I will reject is charter of cooperation," Bijan Zanganeh said on arrival in Vienna for the OPEC talks. "It's not the time to discuss this."

The comments may complicate talks among OPEC and its 10 non-OPEC partners in the Austrian capital on their 1.2 million b/d supply cut agreement that expired Sunday.

OPEC ministers are meeting Monday to decide on next steps, with the non-OPEC participants joining talks on Tuesday.

Zanganeh told reporters in Vienna that he was not opposed to continuing the cuts. Leaders for Saudi Arabia and non-OPEC Russia announced over the weekend after the G20 summit in Japan that they had reached a consensus on continuing the supply curbs, with ministers from both countries endorsing a nine-month extension.

"I have no difficulty with extension of cut or more cut," Zanganeh said. "I don't want to block the cut."

But OPEC's integrity was at stake, he added.

"Iran is not threatening to leave OPEC but I believe OPEC is going to die with these processes," Zanganeh said.

Iranian officials have previously accused Saudi Arabia of destroying OPEC unity by politically supporting US sanctions against Iran and Venezuela and making deals on oil policy with Russia without consulting other members.

Saudi Arabia, meanwhile, has accused Iran of being behind a series of oil tanker attacks near the Strait of Hormuz in the past month, which Iran has denied.

Earlier Monday, Zanganeh had said OPEC members should consult amongst themselves first on oil policy before striking deals with producers outside the bloc.

"Without the unity of OPEC, it is meaningless to plan cooperation between OPEC member states and non-members," Zanganeh said, according to Iran's oil ministry news service Shana. "Iran supports cooperation with oil exporters outside OPEC, but as long as some members of OPEC have tensions against other members, such as Iran, OPEC's understandings with non-OPEC are meaningless and there is no room for cooperation."

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6 hours ago, ceo_energemsier said:

Iran will not block OPEC/non-OPEC oil cut extension, but will veto charter

Iran's oil minister on Monday said he will veto OPEC's long-mooted charter intended to formalize its oil market coordination with Russia and nine other non-OPEC partners, if it comes up during the producer bloc's meeting later Monday.

"The item of agenda I will reject is charter of cooperation," Bijan Zanganeh said on arrival in Vienna for the OPEC talks. "It's not the time to discuss this."

The comments may complicate talks among OPEC and its 10 non-OPEC partners in the Austrian capital on their 1.2 million b/d supply cut agreement that expired Sunday.

OPEC ministers are meeting Monday to decide on next steps, with the non-OPEC participants joining talks on Tuesday.

Zanganeh told reporters in Vienna that he was not opposed to continuing the cuts. Leaders for Saudi Arabia and non-OPEC Russia announced over the weekend after the G20 summit in Japan that they had reached a consensus on continuing the supply curbs, with ministers from both countries endorsing a nine-month extension.

"I have no difficulty with extension of cut or more cut," Zanganeh said. "I don't want to block the cut."

But OPEC's integrity was at stake, he added.

"Iran is not threatening to leave OPEC but I believe OPEC is going to die with these processes," Zanganeh said.

Iranian officials have previously accused Saudi Arabia of destroying OPEC unity by politically supporting US sanctions against Iran and Venezuela and making deals on oil policy with Russia without consulting other members.

Saudi Arabia, meanwhile, has accused Iran of being behind a series of oil tanker attacks near the Strait of Hormuz in the past month, which Iran has denied.

Earlier Monday, Zanganeh had said OPEC members should consult amongst themselves first on oil policy before striking deals with producers outside the bloc.

"Without the unity of OPEC, it is meaningless to plan cooperation between OPEC member states and non-members," Zanganeh said, according to Iran's oil ministry news service Shana. "Iran supports cooperation with oil exporters outside OPEC, but as long as some members of OPEC have tensions against other members, such as Iran, OPEC's understandings with non-OPEC are meaningless and there is no room for cooperation."

How do you think this and the other geopolitical situations will affect the price of WTI over the next 6-8 months?

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OPEC agrees to nine-month rollover of oil production cuts

Charter to formalize non-OPEC alliance set aside for now

Secretary General Mohammed Barkindo reappointed to three-year term

OPEC meets with non-OPEC partners on Tuesday

 

OPEC on Monday approved in principle a nine-month rollover of its output cut agreement at the same levels, two sources told S&P Global Platts, as the producer group seeks to shore up prices in the face of flagging demand growth.

 

The deal now must be approved by OPEC's 10 non-OPEC partners, including Russia, at a meeting Tuesday, scheduled to begin at 10 am local time (0800 GMT).

Russia's energy minister, Alexander Novak, has already endorsed a nine-month extension of the cuts, which expired Sunday.

OPEC's meeting was still continuing, however, more than an hour after the press conference was scheduled, as ministers were hashing out compliance levels, sources said, asking not to be named because of the sensitivity of the discussions.

The 24-country OPEC/non-OPEC coalition had agreed in December to a 1.2 million b/d supply cut accord that ran through the first half of 2019. Tepid demand growth forecasts and surging US oil production have kept a lid on prices, prompting the producer bloc to discuss an extension.

However, a charter that would have made permanent OPEC's market management alliance with its non-OPEC partners has been taken off the table for now, due to Iran's objection that OPEC was allowing too much influence to producers who are not bound by the organization's bylaws and commitments.

"Further consultations are needed," one source said.

Also Monday, OPEC approved another three-year term for Secretary General Mohammed Barkindo, two sources said.

Barkindo, who has held the post since summer 2016, has shepherded the producer group through two and a half years of output cuts and has made a mark for himself with his international diplomacy.

The secretary general serves as OPEC's public face and spokesman, as well as overseeing the organization's secretariat in Vienna.

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