With OPEC delegates sequestered in a Vienna conference room, as they negotiate the proposed 6-9 month production cut extension, at least one appears to be leaking the decision process to media outlets, because moments ago Bloomberg reported that OPEC ministers have agreed to extend their production cuts until the end of 2018 – agreeing with the Saudi-proposed 9 month extension – and discussions have now moved on to the mechanism that will be used to review the agreement in the middle of the year.
- OPEC AGREES TO EXTEND OIL SUPPLY CUTS TO END OF 2018: DELEGATE
- OPEC TALKS MOVED ON TO DETAILS OF MID-YEAR REVIEW: DELEGATE
These were some of the earlier headlines heading into the “announcement”:
- IRAQ SAYS RUSSIA JOINING IN EXTENDING OUTPUT CUTS TO END OF ’18
- SAUDI MIN: WE WILL REVIEW OUR EFFORTS IN JUNE NEXT YEAR
- SAUDI MIN: OPEC+ MUST DO MORE BECAUSE OVERHANG REMAINS
- AL-FALIH: IN 2Q AND 3Q, WE’LL SEE HEALTHY INVENTORY DRAWDOWNS
- IRAQ COMMITTED TO LEVEL OF OPEC CUTS
- U.A.E.: OPEC LOOKING FOR WIDER GROUP OF COUNTRIES TO JOIN CUTS
- IRAN SAYS NO DISCUSSION TO RAISE CUTS VOLUME BEYOND 1.8M B/D
While oil prices had traded near session highs ahead of the leaked announcement, they have failed to spike on the news and in fact Brent is back under $64, suggesting that, as Goldman predicted, a favorable outcome had been more than priced in, and now the details of the agreement will determine which way oil moves next.
As Citi wrote moments before the report, “it looks like a 6-9 month extension is the most common expectation amongst OPEC members, though the inclusion of caveats is looking increasingly likely.
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