WTI crude oil
Oil prices are in a strong risk mood, and there are signs that OPEC+ countries are following through on the promised production cuts. The cuts went into effect on May 1, but early indications were that exports from Russia were high, and many were skeptical of following them, creating the risk of a cartel collapse. Today, however, Russia’s Energy Minister Novak has confirmed production cuts, and secondary data also show a slowdown in production.
RBC also claims Saudi Arabia could compete within their quota.
Saudi crude oil production has recovered above 10.8 million barrels per day after falling below 10 million barrels per day in the first two months of the year and averaging 400 kb/d below its quota since November. ing. This indicates that the actual physical impact seen in May exceeds the announced daily dose of 500kb in the Kingdom on a morning/month basis.
Crude could have a double bottom on the charts, driven by a very negative spec position along with low global inventories and potential replenishment of some SPR barrels. . A double dip will be confirmed by a rally above $85, but until then there is $13, so for the time being the market will be watching to see if oil prices break above $75 on a closing basis.
