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The OPEC+ group of 23 oil producers is expected to continue its oil policy when it meets on Sunday, meaning the group is unlikely to increase output cuts beyond a 2M bbl/day cut. it was ordered in October, but some prominent market watchers say further cuts are possible due to economic growth and demand.
OPEC+ says it hopes to assess how the $60/bbl price on Russian crude oil will affect the markets when it starts working on Monday, and get a clearer picture of demand in China, which has struggled to reopen its economy as planned due to the restart. of cases of COVID-19.
“Given the high level of uncertainty in the market, [OPEC] We cannot do anything else this Sunday,” said Barbara Lambrecht of Commerzbank.
Analysts at JP Morgan say OPEC+ will likely hold production and leave the door open for a 500K bbl/day cut if demand worsens.
The group “would be better off continuing the course” and continuing with the existing plan, Rystad’s Claudio Galimberto told CNBC.
But Goldman Sachs global chief Jeff Currie sees a “significant opportunity” to be cut due to continued weakness in China.
RBC Capital’s Helima Croft sees no expected increase from the OPEC+ meeting and a “significant opportunity” for higher prices.
The effects of a 2M bbl/day oil shortage in October were offset by an increase in oil output from Russia – an OPEC+ member – to 10.9M bbl/day in November, which led to a group reduction of about 361K bbl/day, Bloomberg reported.
Nymex crude (CL1: COM) for the forward month of January has closed +4.8% for the week to $79.98/bbl when February Brent crude (CO1:COM) ended +2.2% to $85.57/bbl, both benchmarks are just missing three-week losing positions.
ETFs: (NYSEARCA: WORK), (NYSEARCA: UCO), (BNO), (SCO), (DBO), (USL), (USOI), (NRGU)
Energy (XLE) was the S&P 500’s best performing sector this week, -1.7%.
Top 5 energy and environmental gainers in the last 5 days: (TOPS) +81.2%(HTOO) +39.6%(NFGC) +32.6%(CORR) + 19.8%(IE) + 19.5%.
Top 10 energy and natural resources in the last 5 days: (SLDP) -28.5%(NRGV) -27.8%(WHAT) -26.6%(PBF) -19.7%(OGS) -17.5%(VTNR) -16.3%(STEM) -14.6%(DK) -14.3%(Peggy) -14.2%(CVI) -13.8%.
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