William Wates of MarketWatch reports that a decision by OPEC+ to delay production increases bought some time for the oil cartel, but producers could find themselves in the same position three months from now. Wates writes:
Oil futures were little changed Thursday morning after the Organization of the Petroleum Exporting Countries and its allies, as expected, agreed to further postpone a proposed unwinding of production cuts in the face of ample global supply and shaky demand from China. […]
OPEC+ appears to want to push the increase “to a point where Chinese demand growth emerges from the economic swamplands, and powers global crude oil demand growth into the future,” Robert Yawger, executive director for energy futures at Mizuho Securities, said in a note ahead of the decision. “That is a tough ask and may take a while, but that seems to be the game plan moving forward.”
The Wall Street Journal on Wednesday reported that some OPEC+ members pushed for increased production to maximize short-term profits, partly due to expectations for increased production from U.S. shale drillers following Donald Trump’s presidential election victory. The report said Saudi Arabia is likely to keep its oil production tight and further push back plans to loosen its own spigots.
Read more here.
