Yesterday post the OPEC+ meeting an announcement was made that the new baseline production will continue in 2024. In addition, Saudi will do a voluntary cut of one million bbl/ day in July. The twist is whether this cut is continued or not will remain unknown for some time.
This became an issue for the USA as it was looking to refill its Special Purpose Reserves ( SPR ). Though in reality, it continues to withdraw from it. China and India might not get much impact from this as they continue to increase imports from Russia.
The decision looks more towards fighting against the money managers as they continue to short the crude oil prices. As of May end the net short of WTI contracts was a recent high at 23,208. Though some of this position might have been closed today as the crude prices had a gap up opening or more than 2%.
The next meeting is scheduled for November end. But within this period the uncertainty over Saudi cut rollover, Ukraine counteroffensive and USA SPR refill. The price volatility is likely to increase and any spike in prices leading to supply disruption to China or India. It will lead to a very troubled winter, resulting in the next round of inflation problems.
Yesterday post the OPEC+ meeting an announcement was made that the new baseline production will continue in 2024. In addition, Saudi will do a voluntary cut of one million bbl/ day in July. The twist is whether this cut is continued or not will remain unknown for some time.
This bbecame an issue for the USA as it was looking to refillits Special Purpose Reserves ( SPR ). Though in reality, it continues to withdraw from it. China and India might not get much impact from this as they continue to increase imports from Russia.
The decision looks more towards fighting against the money managers as they continue to short the crude oil prices. As of May end the net short of WTI contracts was a recent high at 23,208. Though some of this position might have been closed today as the crude prices had a gap up opening or more than 2%.
The next meeting is scheduled for November end. But within this period the uncertainty over Saudi cut rollover, Ukraine counteroffensive and USA SPR refill. The price volatility is likely to increase and any spike in prices leading to supply disruption to China or India. It will lead to a very troubled winter, resulting in the next round of inflation problems.
Comments