If OPEC+ Announces a New Cut, It May Not Be Quite What It Seems - Bloomberg

If OPEC+ Announces a New Cut, It May Not Be Quite What It Seems - Bloomberg:

Speculation is mounting that OPEC and its allies may agree a deeper production cut at their meeting in Vienna on Thursday, but market watchers shouldn’t take any such announcement at face value.

Even a sizable “new” cut like the 400,000 barrel-a-day reduction Iraq’s Oil Minister Thamir Ghadhban was suggesting wouldn’t necessarily remove any oil from the market. It could simply formalize the group’s current production, which has been well below its target for most of 2019.

A year ago, the Organization of Petroleum Exporting Countries and its allies agreed to remove 1.2 million barrels a day from the market. In October, their cuts actually added up to about 1.7 million barrels a day, according to the group’s Joint Technical Committee.

So the group could deepen its output-cuts target by as much as 500,000 barrels a day without requiring any member to pump less oil.