{"id":52335,"date":"2020-04-09T15:52:52","date_gmt":"2020-04-09T20:52:52","guid":{"rendered":"https:\/\/olduvai.ca\/?p=52335"},"modified":"2020-04-09T15:52:59","modified_gmt":"2020-04-09T20:52:59","slug":"oil-turns-negative-after-russia-saudis-agree-to-cap-output-at-8-5mm-b-d-for-2-months","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=52335","title":{"rendered":"Oil Turns Negative After Russia, Saudis Agree To Cap Output At 8.5MM B\/D For 2 Months"},"content":{"rendered":"\n

Oil Turns Negative After Russia, Saudis Agree To Cap Output At 8.5MM B\/D For 2 Months<\/a><\/h3>\n\n\n\n

Update (1350ET)<\/u><\/strong>: What started off euphorically, has quickly become R-OPEC’s latest dud, with oil now sliding red on the day after earlier surging more than 10%, following the latest news out of the oil producerteleconference, according to which Russia and Saudi Arabia agree to cap production to 8.5MM b\/d, indicating a production cut of about 23% each, and which will last for just two months, May and June. <\/strong><\/p>\n\n\n\n

Furthermore, as Iran’s oil minister explains, the total cut of 10MMb\/d (which will include several non Russia\/Saudi producers) will ease to 8MMb\/d in July and then after Jan 2021, the cut will decline to just 6 million b\/d production cut.<\/p>\n\n\n\n

In a nutshell, R-OPEC is hoping for two things: i) oil demand will rebound after the summer and the oil market will stabilize organically as the global economy recovers from the coronavirus and ii) the US and other G20\/non-OPEC producers join the cuts voluntarily, which however is far from assured.<\/p>\n\n\n\n

Meanwhile, even with the 10mm b\/d cut (which is really about 7 millions if one uses Saudi Arabia’s Feb production numbers) will be nowhere near enough to offset the\u00a0global demand plunge\u00a0<\/a>which according to industry watchers such as Trafigura is as large as 35mmb\/d!<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

And now that the initial euphoria has worn off and traders are able to do math again – and realize that the cuts are not nearly enough – oil has slumped and was trading in the red last as once again, OPEC has failed to live up to the hype.<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

Finally, as a reminder, here is why Goldman believes that after today’s pomp and circumstance, oil is still going to $20:<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil Turns Negative After Russia, Saudis Agree To Cap Output At 8.5MM B\/D For 2 Months Update (1350ET): What started off euphorically, has quickly become R-OPEC’s latest dud, with oil now sliding red on the day after earlier surging more than 10%, following the latest news out of the oil producerteleconference, according to which Russia and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[441,589,1435,596,701,4318],"class_list":["post-52335","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-iran","tag-oil-demand","tag-oil-production-cut","tag-oil-supply","tag-saudi-arabia","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52335"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52335\/revisions"}],"predecessor-version":[{"id":52336,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52335\/revisions\/52336"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}