There is a proposal to bring forward the OPEC + meeting to June 4th, which is currently scheduled for June 9-10. ING Economics also says so, according to which it would allow consideration any changes to production cuts. In addition, there are press rumors that OPEC + is looking to extend the current cuts to 9.7 million barrels per day in 1-3 months. Under the current agreement, OPEC + is expected to reduce the scale of cuts to 7.7 million barrels per day from July. According to ING Economics, a shorter period could make aextension more palatable for the Russians, who were unwilling to extend the current cuts until the end of this year.
Wti drops above $ 35 from March shock
Last Friday, oil accelerated upward in the final session (Brent momentum overcame the resistance placed at $ 36.4), benefiting from signs of possible further contraction of US production. We read it in a report by MPS Capital Services, adding that the number of new drilling in the country continues, in fact, to decline, updating the new lows since 2009.
The oil market has largely ignored the growing tensions between the United States and China, with oil prices having jumped to a close on Friday: the WTI gained over 5%, managing to move above $ 35 a barrel for the first time since early March. We read it in the report of ING Economics, according to which there is an abundance of speculative money in WTI trading, with the long net position that has increased by 14,266 lots in the last week of reference, reaching a total of 362,724 lots starting from Tuesday last.
This is the biggest long speculation in WTI trading since September 2018, ING Economics writes explaining that speculators took advantage of lower prices for an interesting entry point. The fact that we have witnessed a significant slowdown in US drilling and production closures will give these speculators some confidence, or at least comfort. ING Economics notes that Brent has not seen the same level of interest to purchase by speculators in recent weeks. While the Brent long net position has increased by 14,757 lots in the last week, the overall position is still quite small, with the long net position at 173,196 lots, well below the almost 430 thousand long position seen at the beginning of the year. .
The divergence between WTI and Brent is well reflected in the spread, underlines ING Economics, with the WTI discount on the Brent which decreased significantly in recent weeks and currently at around $ 2 a barrel, compared to more than $ 7 a barrel in late April.