XOM - Oil price buoyed as OPEC production sinks
OPEC released its Monthly Oil Market Report Tuesday, noting that Q2 oil demand expectations were reduced for the cartel, as China lockdowns impacted use; however, annual demand growth of 3.4mb/d was "broadly unchanged" as 2h demand expectations increased. Perhaps more importantly, supply from the cartel fell month over month in May by 176kb/d, with supply from the "core group of 10" rising only 35kb/d, versus a quota increase of 277kb/d. June quotas are set to increase 277kb/d for the core group; however, collapsing production in Libya threatens to reduce supplies for the broader OPEC cartel (TTE) (OTCQX:REPYY). While Saudi (ARMCO) and the UAE saw production rise in May, Saudi growth was ~50kb/d below quota; Nigerian production (XOM) (SHEL) saw the country miss quota by a full 491kb/d in May. Oil prices (CO1:COM) (CL1:COM) (USO) rallied on the release, as an OPEC supply response to elevated prices becomes increasingly unlikely.
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Oil price buoyed as OPEC production sinks