Dec 9, 2019

OPEC prevents the bottom from dropping out

Photo: Omar Marques/SOPA Images/LightRocket via Getty Images

The upshot of the revised OPEC+ deal seems to be that they've kept a floor under prices for now and even pushed them up, but they've hardly juiced the market.

Catch up fast: OPEC and allied producers including Russia on Friday deepened their production-limiting deal by 500,000 barrels per day as they seek to prevent a glut. But there was a twist: Saudi Arabia pledged to continue with a voluntary output cut of another 400,000 daily barrels.

  • That means an overall cut of 2.1 million barrels per day through March, when they'll revisit things.

Where it stands: Brent crude is trading down at roughly $63.79 this morning, slipping after a $1-per-barrel rise Friday that capped several days of gains as officials met to discuss production cuts.

What they're saying: Barclays analysts, in a note, called the cut "surprisingly deep."

  • But they caution: "[A] lack of clarity on the path for the group's output beyond 31 March 2020 and the exclusion of condensates from Russia's target calculations partly tempered the bullish sentiment."
  • Rapidan Energy Group, which had been predicting such a cut, expressed doubt about its efficacy.

But, but, but: They doubt it will be enough to "avert steep inventory builds (well above seasonal swings) and a corresponding crude price selloff in the coming weeks-to-months."

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OPEC is still having a hard time exerting its sway amid U.S. oil boom

Saudi Minister of Energy Prince Abdulaziz bin Salman al-Saud on Dec. 5. Photo: Joe Klamar/AFP via Getty Images

A new International Energy Agency report underscores why oil markets haven't been hugely impressed with last week's OPEC+ decision to deepen their output curbs.

Driving the news: The agency's latest closely watched monthly report projects that global oil stockpiles could increase by 700,000 barrels per day in the first quarter of 2020.

Go deeperArrowDec 12, 2019

Geopolitical risk storms back into oil markets

Illustration: Sarah Grillo/Axios

Iran's response to the U.S. killing of Qasem Soleimani, a top Iranian military official, could target oil infrastructure and transit in the Middle East, analysts say.

Driving the news: The airstrike in Iraq that killed Soleimani pushed prices sharply upward last night and into this morning.

Go deeperArrowJan 3, 2020

America blows past the world in oil and natural gas

Data: Oil Change International and the Global Gas and Oil Network, with data from Rystad Energy; Chart: Danielle Alberti/Axios

America is poised to produce far more oil and natural gas over the next five years than any other country in the world, according to a new report.

Why it matters: It shows how America, already the world’s largest oil and gas producer, is poised to cement that position, with pivotal implications for geopolitics and climate change.

Go deeperArrowDec 10, 2019