COVID Market Update
- If you want to know where OPEC’s production is heading, one needs only to look at their next month’s OSP, particularly to its largest market, Asia. This week, Saudi Arabia raised its June OSP to Asia, as well as to the US and Europe, in a clear sign that it is indeed cutting production and planning fewer exports. This isn’t difficult for Saudi Arabia to achieve, as their April production was at an all-time high as it tried to regain market share in an aggressive grab designed to get the upper hand in the Russian production cut saga and quash US shale.
- The Texas Railroad Commission gave up on the idea of planned production cuts after two of the three chairmen voted the measure down. The measure was supported mainly by smaller oil companies, while the larger more integrated--and therefore better positioned--companies were opposed to the measure. Chairman Ryan Sitton, in favor of production cuts for the industry, argued that the measure was never really seriously considered.
- Devon Energy Corp (DVN) said it would shut in 10,000 bpd for Q2, with the potential for additional cuts as needed, to be decided on a month-to-month basis. Devon is a major producer in the Permian basin, where it produces 84,000 bpd of its total 155,000 bpd expected after the curtailment.
- And, in some way, on the oil and gas scene at least, COVID-19 is positioning Turkey’s Erdogan for a bit of a win in the Mediterranean. Italian Eni…