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

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...


Stan Smith Jul 11, 2017 11:51 AM Permalink

    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.

adr Jul 11, 2017 9:53 AM Permalink

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.

Crypto Kevin (not verified) Jul 11, 2017 8:47 AM Permalink

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

zebra77a Jul 11, 2017 8:31 AM Permalink

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.

NoWayJose Jul 11, 2017 8:29 AM Permalink

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?

NoWayJose Jul 11, 2017 8:24 AM Permalink

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'.

lester1 Jul 11, 2017 8:22 AM Permalink

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! AUDIT THE FED NOW!!

mo mule Jul 11, 2017 8:17 AM Permalink

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

BritBob Jul 11, 2017 8:12 AM Permalink

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...

froze25 (not verified) Jul 11, 2017 8:08 AM Permalink

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.