Oil Stumbles Back To $50 Handle As Saudi/OPEC Jawboning Fails
by Tyler Durden
Apr 20, 2017
Oil prices limped higher overnight as desperate jawboning of OPEC production cut deal extensions by the Saudis supported a recovery from yesterday’s post-inventories plunge. However, confirming the market’s lack of faith in OPEC (and Saudi’s ability to hold the deal together), WTI prices are sliding back towards a $50 handle as jawboning half-lives slump.
As The FT reports, oil producers are moving closer towards agreement on extending the Opec-led deal to limit output, Saudi Arabia’s energy minister said on Thursday, as the cartel battles excess stockpiles and a resurgent US shale industry that have weighed on prices. Khalid al-Falih said the deal could be run for another three to six months beyond the end of June. Under the terms of the existing accord, Opec members and countries outside the cartel, including Russia, agreed to cut their output by about 1.8m barrels a day throughout the first half of 2017. A preliminary agreement to extend the deal had been reached by most, but not all, producers, he said.
“Consensus is building, but it is not done yet,” Mr Falih told reporters on the sidelines of an energy industry event in Abu Dhabi. “We are still in consultations.”