Let's try this Fib Action = Fib Reaction?
Comment:
If the grand oil-output bargain between a group of countries that don’t trust each other is doomed to fail how low could the oil price go?
Comment:
Saudi Aramco to release May crude official prices on Sunday
Even with the 10mm b/d cut will be nowhere near enough to offset the global demand plunge which according to industry watchers such as Trafigura is as large as 35mmb/d
OPEC Secretary General Barkindo says oil market fundamentals are "horrifying," and warns that Q2 excess supply is "beyond anything seen before," adding that global crude storage could be exhausted in May.
Canada did not agree to specific oil production cuts in G20 meeting, natural resources minister says.
Trump says US will cut oil production to secure global deal, but the US antitrust law prohibits oil companies from coordinating their production, and there is no direct mechanism for the government to dictate production levels to private oil companies.
Even with the 10mm b/d cut will be nowhere near enough to offset the global demand plunge which according to industry watchers such as Trafigura is as large as 35mmb/d
OPEC Secretary General Barkindo says oil market fundamentals are "horrifying," and warns that Q2 excess supply is "beyond anything seen before," adding that global crude storage could be exhausted in May.
Canada did not agree to specific oil production cuts in G20 meeting, natural resources minister says.
Trump says US will cut oil production to secure global deal, but the US antitrust law prohibits oil companies from coordinating their production, and there is no direct mechanism for the government to dictate production levels to private oil companies.
Comment:
Assuming that Mexico finally agrees, or others agree to the US making up for Mexico, it is important to point out that this is not a 10MMbbls/d cut from 1Q20 levels. Given that output was higher during the reference month for this deal, the effective cut from 1Q20 levels is more in the region of 7MMbbls/d over May and June, and then around 5MMbbls/d for the remainder of the year. So while the cuts are significant, they are not as big as the headline numbers suggest, and therefore not as bullish as one would imagine.