OPEC extended production cuts that were originally agreed in December 2016 for another 9 months, delivering both OPEC members and Russian discipline that will last well into the Spring of 2018.
And still the Saudis and OPEC continue to get no respect at all, like Rodney Dangerfield.
The oil markets, in fact, after a two-week boom in prices, used the actual date of the meeting to retreat from their highs, ending the day below $50 a barrel.
This could be a reaction to the very late speculative players trying to take advantage of a decision that was reached many weeks ago catching them as the last longs in a market already up from the mid-$40’s. But more than that, there is a deep disappointment from many market players, who were now expecting even more than a 9 month extension and perhaps even deeper cuts.
Goldman Sachs is apparently preparing already for a replay of oil gluts in late 2018.
Bloomberg’s oil geopoliticist, Leonid Barshinsky is quick to take OPEC to task for their mistake in changing course in December, shoring up production and starting the global rebalancing process.
Wow – a lot of negativism still overwhelming this oil market.
I, for one, have marveled at how the Saudis have managed to put and hold together their strategy for regaining control of global oil pricing. Five years ago, we’d be suspiciously betting on who would be first to cheat on quotas, not whether they would be cheated on. Now…