OPEC Production Cut Won't Shock Or Awe Oil Markets - Bloomberg:
Even as stalwarts of the energy calendar such as CERAWeek bow out in the face of coronavirus, OPEC+ is doggedly convening this week in its Viennese petri dish. But in what may count as the most OPEC-plussy move ever, the organization waited until beyond the last minute, after many journalists had flown in already, to inform them they wouldn’t actually be allowed to enter the building.
OPEC+ is having a hard time responding to a black swan that threatens a repeat of the global financial crisis. IHS Markit, which shelved CERAWeek, now estimates oil demand in the first quarter will fall by 3.8 million barrels a day, sharper even than in early 2009. It now also expects 2020 will record an annual decline, an exceedingly rare occurrence.
OPEC+ has inherent weaknesses, exemplified by the fact that it had to add that “+” in the first place. Of the 20 members subject to supply curbs, just four — Kuwait, Russia, Saudi Arabia and the United Arab Emirates — account for 70% of the oil being withheld 1 . Of those four, Russia has never really put the “us” in “plus” and has resisted calls for even deeper cuts this year. The rest of the gang mostly offer the comfort of numbers and a periodic boost for Viennese hotels at this point.
Even as stalwarts of the energy calendar such as CERAWeek bow out in the face of coronavirus, OPEC+ is doggedly convening this week in its Viennese petri dish. But in what may count as the most OPEC-plussy move ever, the organization waited until beyond the last minute, after many journalists had flown in already, to inform them they wouldn’t actually be allowed to enter the building.
OPEC+ is having a hard time responding to a black swan that threatens a repeat of the global financial crisis. IHS Markit, which shelved CERAWeek, now estimates oil demand in the first quarter will fall by 3.8 million barrels a day, sharper even than in early 2009. It now also expects 2020 will record an annual decline, an exceedingly rare occurrence.
OPEC+ has inherent weaknesses, exemplified by the fact that it had to add that “+” in the first place. Of the 20 members subject to supply curbs, just four — Kuwait, Russia, Saudi Arabia and the United Arab Emirates — account for 70% of the oil being withheld 1 . Of those four, Russia has never really put the “us” in “plus” and has resisted calls for even deeper cuts this year. The rest of the gang mostly offer the comfort of numbers and a periodic boost for Viennese hotels at this point.
No comments:
Post a Comment