OPEC Agrees To Extend Oil Supply Cuts Until End Of 2018: Bloomberg

Update : maybe not so fast on the champagne, because according to Reuters, the Bloomberg leaker may have jumped the gun:

  • OPEC YET TO DECIDE ON OUTPUT CUT EXTENSION, TALKS CONTINUING - DELEGATE: RTRS.

* * *

With OPEC delegates sequestered in a Vienna conference room, as they negotiate the proposed 6-9 month production cut extension, at least one appears to be leaking the decision process to media outlets, because moments ago Bloomberg reported that OPEC ministers have agreed to extend their production cuts until the end of 2018 - agreeing with the Saudi-proposed 9 month extension - and discussions have now moved on to the mechanism that will be used to review the agreement in the middle of the year.

  • OPEC AGREES TO EXTEND OIL SUPPLY CUTS TO END OF 2018: DELEGATE
  • OPEC TALKS MOVED ON TO DETAILS OF MID-YEAR REVIEW: DELEGATE

These were some of the earlier headlines heading into the "announcement":

  • IRAQ SAYS RUSSIA JOINING IN EXTENDING OUTPUT CUTS TO END OF '18
  • SAUDI MIN: WE WILL REVIEW OUR EFFORTS IN JUNE NEXT YEAR
  • SAUDI MIN: OPEC+ MUST DO MORE BECAUSE OVERHANG REMAINS
  • AL-FALIH: IN 2Q AND 3Q, WE'LL SEE HEALTHY INVENTORY DRAWDOWNS
  • IRAQ COMMITTED TO LEVEL OF OPEC CUTS
  • U.A.E.: OPEC LOOKING FOR WIDER GROUP OF COUNTRIES TO JOIN CUTS
  • IRAN SAYS NO DISCUSSION TO RAISE CUTS VOLUME BEYOND 1.8M B/D

While oil prices had traded near session highs ahead of the leaked announcement, they have failed to spike on the news and in fact Brent is back under $64, suggesting that, as Goldman predicted, a favorable outcome had been more than priced in, and now the details of the agreement will determine which way oil moves next.

As Citi wrote moments before the report, "it looks like a 6-9 month extension is the most common expectation amongst OPEC members, though the inclusion of caveats is looking increasingly likely. Comments from Saudi’s Al-Falih suggesting that they expect to see healthy inventory drawdowns in 2Q'18 and 3Q'18 hint that the Kingdom may not be keen to commit to a firm extension beyond that, instead perhaps looking to keep their optionality open."

Bloomberg also reported the Russian Energy Minister saying that specific details of the cuts will be discussed today along with "issue of gradual recovery" (details of which could swing the market today). There is also chatter around Nigeria's current production levels - Nigeria (along with Libya) is currently exempt from the cuts, but it would be an interesting development if these countries joined the deal (though no further comments on this aspect as yet).

Comments

new game Thu, 11/30/2017 - 07:17 Permalink

OT: most important legislation in a decade!National reciprocity for concealed carry passed the House Judiciary Committee on Wednesday is expected to receive a floor vote before the end of the year.The Concealed Carry Reciprocity Act of 2017 was introduced by Rep. Richard Hudson (R-NC) on January 3, 2017. It changes federal law that so concealed carry permits are treated like driver’s licenses, making a permit from one state valid in the other 49. This would fix the complicated and often confusing patchwork of concealed carry laws currently in effect throughout the country.To put it simply, Hudson’s bill allows the common man to defend himself and his family as he travels throughout this country.On November 28 Breitbart News reported that Hudson’s legislation was scheduled for a markup in the House Judiciary Committee and the markup would serve as the last stop before a floor vote.In fact, the markup demonstrated the committee’s confidence that national reciprocity was headed to the floor.Hudson released the following statement once national reciprocity passed out of the House Judiciary Committee: 

My bill is a simple, common sense solution to the confusing hodgepodge of concealed carry reciprocity agreements between states. It will affirm that law-abiding citizens who are qualified to carry concealed in one state can also carry in other states that allow residents to do so. I am pleased to see such strong support in committee, and I look forward to continuing this momentum and bringing the bill to the House floor as soon as possible. MY EDIT,FWIW:ONLY WITH TRUMP AS PREZ
indygo55 Thu, 11/30/2017 - 07:18 Permalink

They have never kept their word on limits and there's no indication they will ever keep it. This is jawboning the price of oil a little higher another few days until the next jawbone event. 

Son of Captain Nemo Thu, 11/30/2017 - 07:39 Permalink

Because the Saudi Kingdom is nigh out of the "black stuff" and they are losing all of their other ambitious project(s) in Syria, Yemen, Iraq, Libya whilst continuing to pay for the mercenaries on behalf of their British and American "interlocutors"...

Might as well dump the rest of it as a "black eye" to your competition as you raise money for your public stock offering as "pan handling" to stay in your homes in London, Manhattan and Monaco?!!!

Son of Captain Nemo Dukes Thu, 11/30/2017 - 10:56 Permalink

Don't believe those rag heads when they say they won't have an IPO (http://www.zerohedge.com/news/2017-10-17/aramco-ipo-brink-collapse)!...

Why?...

Well cause everyone else in the neighborhood is telling them their $$$ money is no good!

https://southfront.org/egypt-allow-russia-deploy-military-planes-soil/

https://southfront.org/sudan-offers-russia-to-establish-military-base-o…

http://www.zerohedge.com/news/2017-11-29/china-deploy-elite-troops-syri…

And you have this as proof how desperate the situation is getting in keeping the money "on the reservation"

http://www.zerohedge.com/news/2017-11-10/saudi-deep-state-prince-bandar…

In reply to by Dukes

mily Thu, 11/30/2017 - 08:14 Permalink

Backwardation has been wet dream for Saudis for quite some time, so the frakers will get shitty deals when hedging 1-2Y timewindow. If my theory is correct, Saudis will also have to crash the WTI price very quickly so the frakers are left unhedged, selling spot below production cost. We'll soon find out