Expert Analysis: The OPEC Cuts May Be Working

18 Mar 2017   OPEC

WTI traded to a 3.5 month low on Tuesday at $47.09 after OPEC members shook production cut deal confidence for a second straight week. Saudi Arabia contributed to bearish concerns by reporting February production of 10.01m bpd for a 263k bpd m/m increase (secondary source estimate for Feb was less than 9.8m bpd) while Iraq released a goal of producing 5m bpd by the end of 2017. – We continue to have a short term positive view of sub $50 WTI choosing to focus on IEA estimates that OPEC is 90 percent compliant with their 1.2m bpd production cut goal (other analysts see +100 percent compliance) rather than the mixed rhetoric from members. To help their effort Bloomberg reported that non-members cut exports by 240k bpd in February. In terms of rhetoric, Saudi Arabia also worked to walk back some of the concerns they created (and perhaps intimidate […]

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