Oil, Opec Plus towards the extension of the cuts (with more discipline)

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Serviceearly summit to date

The summit was brought forward to this afternoon. A sign that there is already a general agreement, also on how to obtain respect for the productive ceilings by Iraq and other “disobedient” countries

by Sissi Bellomo

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(REUTERS)

The summit was brought forward to this afternoon. A sign that there is already a general agreement, also on how to obtain respect for the productive ceilings by Iraq and other “disobedient” countries

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OPEC will meet today at 2.00 pm and two hours later there will be an enlarged summit, with Russia and the other allies: the early call is now official. Which means that the maxi-cut in oil production will continue at least throughout the month of July and that unruly countries, including Iraq and Nigeria, have shown signs of repentance.

Obviously there is no certainty that everything goes smoothly (and at the last coalition meetings there were no surprises). But the L market is betting on a favorable outcome: The summit was originally scheduled for 9 and 10 June and nobody would have changed the agenda if the negotiations had still been on the high seas.

Oil prices, thanks also to the positive surprise on US employment, therefore took off: Brent – more than doubled from the April lows – gained more than 5% going above $ 42 per barrel, while the WTI has touched 40 dollars, canceling the coronavirus effect.

The rumors about the release of the negotiations in Opec Plus, which would have made it possible to bring the decision on the cuts to the weekend, had been circulating for a few hours before the new call appeared on the site of the Organization of crude exporters. A positive turnaround had also been confirmed to Reuters by Saudi minister Abdulaziz bin Salman: “At the moment hopefully there are conditions to ensure that the meetings are successful”.

The details of the agreement remain vague and unofficial: nothing but rumors, probably spread artfully by Russians and Saudis, compact again at the helm of Opec Plus. But barring last minute surprises there are already at least two fixed points.



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