The market is closed today in observance of President’s Day. With that said, there will be no pricing for Argus, OPIS, or Platts, the market for electronic trading will be closing early today, and prices quoted last Friday are in effect until Tuesday @ 6:00 p.m. ET.
New week, same story. The market for WTI crude is continuing to balance its upside potential from OPEC and non-OPEC cuts with the downside potential stemming from the increase in U.S., and several other nations’, supply due to the promising price of over $50/bbl crude. Stuck in the $52 - $55 range for several weeks now, it seems as if each percentage increase in production cut compliance is countered with an additional rig here in the U.S.
The most current compliance rate after the first of a six month deal is 93% for OPEC members and 48% for non-OPEC members. The map below from Bloomberg.com shows the 21 countries involved in this deal and how they stand through January:
As you can see, only four countries have reached their production cut target. Of those four, three are OPEC members: Saudi Arabia, Angola, and Qatar, with Oman being the non-OPEC nation. For the goal to be achieved (balancing global supply with demand) the non-compliant nations will need to catch up, deeper cuts may need to be implemented, or even an extension of the deal might have to happen. Although, any of these bullish moves would inevitably increase the price/bbl of crude oil and continue to make it even more appealing for nations like the U.S. to continue extensive growth and production of oil. Which comes first: $60/bbl crude or another supply glut?