WTI Tumbles Back To $43 Handle After Saudis Breach OPEC Agreement

Tyler Durden's picture

Having v-shaped recovered yesterday after disappointing Russian comments (on no news whatsoever), crude prices are tumbling once again this mornig, WTI back to $43 handle, after Saudi Arabia told OPEC it pumped 10.07 million barrels a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.

As Bloomberg reports, the world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia. Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public.

And the result is yet more downward pressure on cride prices...


Even OPEC sounds like it is losing hope. As Reuters reports, all global oil producers should help balance the market, OPEC's Secretary General Mohammad Barkindo told reporters on Tuesday when asked what else the Organization of the Petroleum Exporting Countries could do to ease a global oil glut.

"It is beyond any group of stakeholders, it has to be a collective responsibility of all producers," he told reporters on the sidelines of an industry conference in Istanbul.

At this rate, Goldman's "below-$40" foreecast may happen this week...

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svayambhu108's picture

Mad Max venezuela 


Comming soon on a highway near you...

VinceFostersGhost's picture



They pump oil over there and send it here.


We pump oil over here and send it there.

NoDebt's picture

Gartman's corpse is showing signs of reanimating.


silverer's picture

When you watch that clip, you realize just how quickly things can change.

froze25's picture

So what, we gonna hit 40 again then back up to 48 and change then touch 40 again. I have seen this movie on basically repeat for the last 2 years.

Arnold's picture

"...the world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement..."

Public face is breaking the production agreement.
Private face never cut back production.

Last of the Middle Class's picture

Kind of like a place crash. Slowly, at first, then suddenly all hell breaks loose very very quickly. That's how monopolies and socialists societies seem to crumble.

BritBob's picture

Falklands oil - worth a punt?

The company Rockhopper Exploration says it has achieved a "fabulous achievement"Rockhopper Exploration Plc revealed the discovery of a "site of world class" in the Sea Lion sea area north of the Falkland Islands.

The company chairman, Pierre Jean-Marie Henri Jungels, made the announcement at the last shareholders meeting of the company. He said it is a "fabulous achievement", comparable to the reserves reported in Argentina private company Pluspetrol . (Diario Digital Notife 14th Dec 2016)

What about the Argentinians?

Falklands – Territorial Waters: https://www.academia.edu/10574593/Falklands_Islands_Territorial_Waters


All hot air...

VinceFostersGhost's picture



Bob........no one give a rat's ass about the Falklands.




Stan522's picture

The Saudi's are just as greedy as any other nation....they can't help themselves....

mo mule's picture

We should see $37 here pretty soon.  This bady may break the prior low of 26.  That's still may not be the bottom, that's 14.  But I doubt we ever see that.  Shock and Awe on NK, or ww3 or yellowstone going off, or Trump tweeting, something is coming?   /s   

Go Donald....  hoora

buzzsaw99's picture

you fucked up.  you trusted us. [/otter]

lester1's picture

No worries. The unaudited Federal Reserves oil PPT will be buying futures today to prop up the price, then dump the oil back into the ocean like they have been doing for YEARS!



NoWayJose's picture

OMG!!! Do the math - that's 12,000 barrels a day over their stated limit. Horrors! That hardly even covers what the G-20 gang used up flying to the meeting.

Can you see the intentional manipulation? Get ready soon for the rebound... when the headline changes to 'Saudis cut production'.

silverer's picture

"To the moon, Alice". lol

NoWayJose's picture

Back when oil was over $50 (less than a year ago) we used to see near daily stories about how fracking and shale well production dropped off rapidly after just a few years and that total shale production had already 'peaked' and that shale oil companies were going bankrupt.

Seen any lately? What does that tell you?

spanish inquisition's picture

SA was under the impression that everyone else would need to adhere to the agreement.

zebra77a's picture

Gartman and Goldman say to short oil. 

[hint] It's time to long oil. Price of a barrel of crude has NOTHING to do with reserves, with production, with drawdown. In the end the price is determined when the guy wearing the towel on his head gets up.

Crypto Kevin's picture

The Saudis will keep pumping until they break the back of American shale producers. Trade accordingly. 

Cordeezy's picture

Oil will be plummeting for the near future.




adr's picture

SO when are we going to see the $1.40 gas that should equal $40 crude?

I'd be happy with $1.75. Gas over $2.00 with oil under $75 is insane.

Still at $2.35 around here, up from $2.25 before July 4th.

Stan Smith's picture

    All of OPEC's countries get so much of their revenues from oil,  there's simply no stopping them from pumping it.   Sure a few of the countries are going to "diversify" their economies,  but in our lifetimes it's hard to envision anything globally coming out of those places other than oil.    Thinking they are going to 'hold the line' on production is laughable.    Especially with Uncle Sam extracting oil and natural gas from every rock, nook, and cranny on the mainland here.    OPEC has no choice but to produce.

BigCumulusClouds's picture

The Saudis and their friends shorted oil before they made this public statement.