2024-06-05 16:47:25 ET
Summary
- OPEC+ has provided some baseline aspirations for phasing out their supply cuts, with some elements of the timeline disappointing oil markets.
- They are principally concerned with the fact that rival capacity has been allowed to grow, and some members in particular have been aggressive about increasing production.
- We think that due to the budgets of some of these companies, and less urgency over clearing assets, OPEC+ are not that firm on the cuts.
- We think that if a more recessionary environment presents itself, where oil demand forecasts aren't that great, OPEC+ wouldn't have an issue abandoning their cuts.
- Ultimately, the phaseout plans are aspirational, and they will play things by ear to benefit maximally from higher prices.
The iShares Global Energy ETF ( IXC ) is seeing some action today as markets digest the latest OPEC+ news , which comes after a long while of OPEC taking it easy with production as we predicted in our previous coverage. The situation is that OPEC+ has delineated their aspirations for reigniting crude production and bringing new barrels to the market....
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For further details see:
IXC: OPEC+ Is Probably Not That Firm On Cut Phase-Out Telegraph