Hedge funds are back in buying mood as of last week, with hopes of further OPEC+ production cuts adding optimism to markets. Analyst predictions that U.S. shale growth will start to slow down next year has also added to this bullish sentiment. But not everyone agrees with those shale claims, Rystad Energy came out with a forecast this week that U.S. shale would keep growing no matter what oil prices do. In the meantime, a real showdown of external forces in Iraq could threaten global oil supplies next year. Oil prices dipped Friday morning in the absence of an official deal from OPEC, but bullish optimism is undoubtedly still there.
OPEC Seals Deal, but Internal Fighting Among Members Persists
While an official announcement has yet to be made, OPEC has reportedly agreed to increase production cuts for OPEC+ after the monitoring committee earlier recommended the production cuts be increased from 1.2 million bpd to 1.7 million bpd.
But nothing has been finalized yet. Two issues now dog OPEC and its allies: 1) the persistent issue of noncompliant members such as Russia, Iraq, and Nigeria, and 2) how to divvy up the “extra” 500,000 bpd of cuts.
The second of those issues threatened to derail the talks late on Thursday, with Angolan officials walking away from the negotiating table, unwilling to agree to cut an additional 11,000 bpd. Iraq, too, was reluctant to add to its cuts, which it hasn't complied with yet anyway. Angola…