'e-OPEC' agrees 9.7mbpd cut extension by a month

We here again, albeit via webcam! As widely anticipated, oil producers' group OPEC has agreed to recommend a roll over its existing 9.7 million barrels per day (bpd) production cut at its latest meeting. Here's a glimpse of the new e-OPEC (click to enlarge). 

Two sources said all members were onboard, with one respondent emphatically declaring there "will be a 9.7 million bpd not ifs or buts." However, the was precious little word on the so-called cheaters. Within OPEC that would be Iraq and Nigeria, and beyond it Kazakhstan. There's plenty of doubt over what to do with Mexico's insistence that it cannot reduce its production level. 

However, Russia and Saudi Arabia, who want non-OPEC and OPEC cheaters brought to heel are so far said to be in agreement with a move to extend the cuts - instituted in April in the wake of the coronavirus pandemic - by a month. Non-OPEC countries are only just joining the meeting, so the market will have further word on that at time of stunted demand and expectations of a dire 2020. 

Monitoring is expected to be stepped up with OPEC's monitoring committee or the Joint Ministerial Monitoring Committee (JMMC) opting to meet every month from June 18 onwards. The next OPEC meeting has been scheduled for Nov 30, followed by an OPEC+ meeting on Dec 1. Ultimately, an exit strategy remains missing and that problem will resurface soon rather than later. 

Ahead of the weekend's OPEC+ meeting, oil futures jumped significantly, with the Brent August contract rising well above $40 per barrel, and WTI July contract coming within tantalizing distance of the said level. There's something incredibly premature about this and the said levels - at least in this blogger's opinion - have arrived at least a month early as one noted in recent opinion column. 

Away from the goings-on at OPEC, here are few of the Oilholic's recent Forbes missives on the world of oil and gas equities:

• 3 Oil Stocks That Might Go Bankrupt In 2020, May 15, 2020
• 5 Top Canadian Oil Stocks To Buy In 2020
• How To Interpret Saudi Wealth Fund’s $2 Billion Splurge On Big Oil Stocks

And that's all for the moment folks! Keep reading, keep it 'crude'!

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To email: gaurav.sharma@oilholicssynonymous.com