After the historically low temperatures across the south this week, it may take weeks for some of the largest refineries in the country to get back up to full production.
Let’s call today the Turkey Turn up rather than the dead cat bounce. Oil complex up slightly today after taking a huge turn down yesterday with WTI settling at $53.43/barrel, its lowest level since October 2017. Oil prices fell amid concerns about rising global supply and growing fear of a global synchronized economic slowdown.
On Saturday OPEC and non-OPEC producers agreed to raise production by 1 million barrels per day (bpd). Perhaps more important than that, they agreed to return to 100% compliance of the previously agreed upon production cuts of 1.8 million bpd. Production was lagging from struggling countries, i.e., Venezuela, Angola and Libya which effectively equated to a production cut of 2.8 million bpd. Most notably, Reuters reports that Venezuela has been pumping more than 500,000 bpd less than its target. So, let’s clear up the math. OPEC and its non-OPEC partners are effectively saying they are going to be ramping up production by 2 million bpd, 1 million to make up for lost compliance and 1 million in additional capacity. How are the markets reacting? The Brent-WTI spread is getting slammed.