Over the weekend, it came as a surprise to the oil industry when prices crashed more than 30% after the recent OPEC+ alliance issued an all-out price war between Russia and Saudi Arabia, leading the market with cheaper oil. During the OPEC+ meeting last week, Russia rejected a proposal to cut 1.5 million barrels per day of production.
The OPEC meeting that concluded today in Vienna ended with ministers approving productions cuts for the first quarter of 2020. The cuts for OPEC+ will be increased from 1.2 million bpd to 1.7 million bpd. A 500,000 bpd cut should be painless for the organization as they are currently at over-compliance with the cuts as a group. Saudi Arabia has been carrying a large portion of the cuts to compensate for the group’s non-compliant members including Iraq, Russia and Nigeria. The group is now tasked with divvying up the cuts and enforcing the members compliance with the cuts.
A recent survey conducted by Reuters found that OPEC oil output has dropped during the month of November from October by 110,000 barrels per day (bpd). The cause is from Angola Production fell due to maintenance, along with Saudi Arabia halted supply output before the initial public offering of state-owned Saudi Aramco.
As many of us are focused on our plans for the Thanksgiving holiday, we need to be aware of market-moving headlines in December that could create a volatile price market – similar to last year. Let’s review some of the events which could present an opportunity to take advantage of market movement and protect your fuel budgets.
According to reports, Iran is quickly going to breach the Uranium-stockpile limit set by the current nuclear deal. President Hassan Rouhani of Iran has already warned that a new deal needed to be in action by Sunday June 7, 2019 or the Islamic Republic will increase enrichment of Uranium. Globally, there is much concern with the growth rate of Iran’s uranium cache, because they are just a step away from weapon-grade levels of uranium.