OPEC mulling the possibility of cutting even deeper than the 1.2mbpd committed under the aegis of the Vienna Alliance has been the main news of the past seven days. The root cause for such a seemingly hasty decision lies in crude demand slowing down across all continents – roughly a year ago most analysts would have forecast that demand would catch up with supply at some point in 2020 if the OPEC+ deal remained intact, current estimates deem it highly unlikely. The Vienna Alliance would also move towards a much stricter quota compliance as Iraq and Nigeria have been either falsifying their actual production numbers or purely selling gold bricks (i.e. Nigeria excluding the 27 API Egina crude from its reported volumes as it considers it a “condensate”) – by getting them to comply OPEC could clear some 0.4-0.5mbpd of crude if needed.
The interaction between OPEC’s stated intention to do more in the post-March 2020 horizon and US commercial crude stocks rising for the second consecutive week have brought global crude benchmark Brent to $59.5-59.8 per barrel, whilst US benchmark WTI was assessed at $54.2-54.5 per barrel.
1. Petrobras Will Market Brazil’s State Crude
- New pre-salt platforms ramping up production have helped Petrobras, the world’s most indebted oil company, to grow its production quarter-on-quarter by a sizeable 10 percent.
- Thanks to the 10-percent hike Petrobras’ 3Q 2019 output…