Quote:
Originally Posted by Fisherdan
I wonder…. I thought they were already missing targets by over 3 million barrels. Maybe this oil rally is just a blip in what has been a downward trend?
|
They are producing less than the groups quota for some time. Each member has a quota but only a handful have any extra spare capacity to produce more than their quota. The burden of the cut will fall on those with extra spare capacity, SA, UAE and a handful of others, so the actual production cut will come in around one million bbl/day.
The OPEC+ cut pretty much matches the Strategic Petroleum Release of one million bbl/day that Biden has been dumping on the market for the last several months. This dump is supposed to end shortly but the Dems may push it out further for political reasons, midterms coming up, but it will end.
OPEC fired a warning shot last meeting with a symbolic 100k cut against Bidens war on oil prices. This cut now is a serious message that OPEC will defend the current price level and sends the message that they are in control of the market, and also that they are in support of Russia as a member. 90$ oil is the new floor whereas they explicitly stated 60$ was just shortly after the pandemic.