May 17, 2019

OPEC's tough balancing act

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Reproduced from an IEA chart; Chart: Axios Visuals

OPEC is lowering its production to levels not seen in years to balance a global oil market rocked by geopolitics from all sides.

Driving the news: The above chart, from an International Energy Agency report released this week (and h/t to Bloomberg's Javier Blas for highlighting it), shows how this year is an outlier compared to previous years when it comes to oil production from the Organization of Petroleum Exporting Countries.

The big picture: America is now the world's largest oil producer in the world, and that's making it harder for OPEC to balance the market, according to Bob McNally, president of consultancy Rapidan Energy Group.

  • Still, he said, the chart should be read not as OPEC getting pushed out by American oil, but instead the sheer volatility in the market:
"The oil market has rarely seen so much two way risk. China, trade and macroeconomic weakness could send crude prices at least $15 lower and intensifying geopolitical disruption risks in the Middle East and Venezuela could propel them higher by a similar amount."

Where things stand:

  • Oil prices have been relatively stable so far this year, in the $60-$70 range per barrel, for both Brent in Europe and WTI in the U.S.
  • OPEC's share of global oil production has generally hovered between 36% where it is today and 41%, which is where it was in 2008, according to IEA data.

What's next? OPEC and Russian officials are meeting Sunday in Saudi Arabia to discuss geopolitical risks including the attacks this week on Saudi oil infrastructure and the oil market ahead of a meeting in late June when production quotas expire, per S&P Global Platts.

What we're watching: Sarah Ladislaw, an expert at the Center for Strategic and International Studies, tells Axios...

"I expect they will talk about inventory levels and send signals that the markets are well supplied but they stand ready to put more supply on the market if they see a need."
"The question is what kind of messaging comes out about recent attacks on oil-related infrastructure in the region."

Meanwhile, a Saudi-led coalition conducted air strikes in Yemen on Thursday in response to the attacks earlier this week, Oil Price reports.

Go deeper ... The mystery of Trump's OPEC call about gas prices

Editor's note: The chart was corrected to show the measurements are in million barrels/day (not thousand).

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Top Trump ally sounds 2020 election alarm over coronavirus response

Photo: Jim Watson/AFP via Getty Images

There is growing concern among top conservative leaders that the Trump administration isn't addressing the long-term economic impact of the coronavirus, several sources tell Axios. One top adviser said if the recovery is bungled it could cost President Trump the election.

What we're hearing: "The next 4-8 weeks is really going to decide whether Trump gets reelected," Stephen Moore, Trump's former nominee for the Federal Reserve board, told Axios. If the administration mishandles its economic recovery efforts, he said, Trump is "in big trouble."

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,600,427 — Total deaths: 95,506 — Total recoveries: 354,006Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 465,329 — Total deaths: 16,513 — Total recoveries: 25,410Map.
  3. Public health latest: U.S. has expelled thousands of migrants under a CDC public health orderDr. Anthony Fauci said social distancing could reduce the U.S. death toll to 60,000.
  4. Business latest: The Fed will lend up to $2.3 trillion for businesses, state and city governments — After another 6.6 million jobless claims, here's how to understand the scale of American job decimation.
  5. 2020 latest: Top conservative leaders are concerned the Trump administration isn't addressing the virus' long-term economic impact.
  6. States latest: FEMA has asked governors to decide if they want testing sites to be under state or federal control.
  7. World latest: Lockdowns have led to a decline in murders in some of the world's most violent countries — Boris Johnson is moved out of the ICU but remains in hospital with coronavirus.
  8. In Congress: Senate in stalemate over additional funding for small business relief program.
  9. 1 SNL thing: "Saturday Night Live" will return this weekend in a remotely produced episode.
  10. What should I do? Hydroxychloroquine questions answeredPets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  11. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Federal court temporarily blocks coronavirus order against some abortions

Gov. Greg Abbott. Photo: Tom Fox-Pool/Getty Images

A federal judge ruled Thursday that clinics in Texas can immediately offer medication abortions — a pregnancy termination method administered by pill — and can also provide the procedure to patients nearing the state's time limits for abortions.

Driving the news: The decision comes after federal appeals court ruled 2-1 on Tuesday in favor of an executive order by Republican Gov. Greg Abbott that prohibits abortions during the coronavirus outbreak.

Go deeperArrowUpdated 5 hours ago - Politics & Policy