The new OPEC/OPEC+ production cut agreement is now a confirmed fact, the world’s leading crude producers (the United States excepting) have agreed to prolong the supply coordination mechanism that has been in place since November 2017 for a further 9 months, up until March 2020. The extent of the cut remains the same, i.e. 1.2mbpd, essentially meaning a rollover of the status quo for the upcoming months. The news stopped short of invigorating the markets, in fact, crude prices slipped $2 per barrel day-on-day on Tuesday, on worries that demand might actually slow down to such an extent that it might render the OPEC+ supply cuts irrelevant.
In addition, disagreements between Saudi Arabia and Russia on the fundamentals of the required global inventory levels have somewhat marred the long-term prospects of the OPEC+ charter. Wednesday saw an uptick in crude levels largely attributable to US crude inventories, yet it still remains to be seen whether the anticipated OPEC-induced price rebound will take place. As of Wednesday afternoon, global benchmark Brent traded at $63 per barrel, whilst WTI was assessed at $56.6-56.8 per barrel.
1. Venezuelan Blending Rising From the Dead
- The Venezuelan national oil company PDVSA is restarting its PetroPiar blending facilities, jointly operated with US oil and gas major Chevron.
- With the US market blocked for synthetic crude previously produced at PetroPiar, PDVSA is now seeking to configurate…