For the first time since the Vienna OPEC deal in 2016, Saudi Arabia is no longer complying with the quota as Bloomberg calculates that in October, the Kingdom boosted crude production above its starting point for oil cuts. According to secondary data, Saudi output in October was 10.63m b/d, higher than the 10.502m b/d in September.
The spike, which not significant in volume terms was meant as a signal: as a reminder, as part of OPEC+ supply cuts, Saudi Arabia agreed to curb production by 486k b/d below the starting point of 10.544m b/d, which was its October 2016 output.
And while Saudi Arabia had fully complied with OPEC+ agreement in every month through May, since then it had continued to cut supply, but by less than it pledged to curb. Then, in October, the data showed the first time Riyadh had increased output above the starting point.
The market reaction was violent: WTI Crude has crashed over 5% on the news, and amid fears that a supply glut may be coming (even as global growth fears stoke demand anxiety):
As a result, WTI has now retraced 60% of the two-year uptrend...
... and is now down over 6% YTD to its lowest since Dec 2017.