- This topic has 8 replies, 2 voices, and was last updated 1 month, 1 week ago by
.
- Posts
OPEC+ announced a surprise cut of over 1 million barrel per day crude oil production cut on Sunday ahead of the scheduled JMMC Monday. This is in addi
[See the full post at: OPEC+ Announces Surprise Cut in Crude Oil Production of Over 1 million Barrels Per Day ]According to FT, Saudi Arabia was “irritated” with the Biden Administration after ruling out new purchases of oil to refill the SPR. WTI crude oil futures are up 6.6% to $80.64/bbl.
Occidental Petroleum (OXY 66.20, +3.77, +6.0%),
Chevron (CVX 170.00, +6.84, +4.2%),
Exxon (XOM 113.92, +4.26, +3.9%)Higher this morning following the surprise oil production cut from OPEC+.
Oil futures have pulled back from earlier highs recently.
WTI crude oil futures, at $81.69/bbl a short time ago, pulled back to $79.81/bbl.
Federal Reserve Bank of St. Louis President James Bullard said OPEC’s decision to cut output was unexpected and an increase in oil prices could make the Fed’s job of lowering inflation more challenging.
“This was a surprise,” he said Monday during an interview on Bloomberg Television with Michael McKee. “Whether it will have a lasting impact I think is an open question.”
Bullard does not vote on monetary policy this year.
“Oil prices fluctuate around. It’s hard to track exactly. Some of that might feed into inflation and make our job a little bit more difficult,” he said.
“I would’ve expected somewhat higher oil prices anyway with China coming back sooner than expected during the first half of 2023 and with Europe skirting recession,” he said. “And strong data in the US, all of those are are pretty bullish factors for the oil market.”
Bullard said he sees an 80% to 85% probability that financial stresses will ease, the economy will continue to grow at a low rate and the labor market will remain tight, with the remaining odds that the turmoil will translate into a worsening economy.
“The problem with Wall Street is they’ve got too much probability on that branch,” Bullard said.
The Fed has adopted a two-pronged strategy that uses macroprudential tools to deal with banking issues, while it continues to deploy monetary policy to try to reduce inflation, Bullard said.
“You can walk and chew gum at the same time,” he said. “You’ve got the macroprudential tools for financial stress and you’ve got monetary policy to fight inflation.”
US Tsy Sec Yellen on OPEC+ Cut
-“Very unconstructive act
– Clearly not positive for global growth
– Move adds to uncertainty & burdens on consumers — Does not see OPEC+ having impact on appropriate level Of Western price capWTI crude oil settled Up $4.75 or 6.28% at $80.42
after the OPEC production cut.
The high was $81.69 and the low $79.00Goldman Sachs on oil comes via Reuters:
Production cuts by OPEC could result in a significantly larger deficit in the market, driving a rally in prices to $100 per barrel by April 2024
Sees “elevated OPEC pricing power – the ability to raise prices without significantly hurting its demand – as the key economic driver”
- You must be logged in to reply to this topic.