Three Events to Watch in the Global Oil Patch
First, while the markets are again overly obsessed with OPEC news (particularly in the aftermath of an oil price war), all eyes will be on OPEC production, which in April rose to 30.412 million bpd, though signs point to major cuts in May. Still, the tension between Saudi Arabia and Russia is manifesting in the public arena, with calls this week between the two indicating that while the Saudis may push for the deeper cuts to be extended through the end of the year, Russia may be leery of doing so--dragging its feet in signing up for more pain just to open the door for U.S. shale to catch enough of a breath to roar back into the market. Rumors surfaced this week that Rosneft is feeling the pain of the production cuts, and has questioned its ability to maintain contractual oil supplies as a result. But if oil inventories are indeed bloated as industries suggest, this is a hard sell to a market that has just survived negative pricing as global storage threatens to reach maximum capacity.
Second, Moscow has shown its hand in Libya. Last week we noted that General Haftar’s external allies in the fight for Libya will either have to show their hand or let the Turks control this game with the GNA, while the UAE (a Haftar ally) would be happy to partition the country and have a foothold in a Haftar-run Eastern Libya. Russia has now stepped up to the plate to counter Turkey/GNA, deploying some 14 warplanes--flown by Russian…
