The OPEC headlines started coming in hot and heavy around 4:30 a.m. EST and it looks like this one broke something:
- Deeper oil-production cuts have been suggested, and member countries indicated flexibility, but not thought necessary, Saudi Oil Minister Khalid Al-Falih says in Vienna before OPEC meeting.
When that hit, prices fell. WTI slipped as much as $1.19 to a day-low $50.17
“Market players are disappointed there is unlikely to be surprise in outcome of OPEC and non-OPEC’s meeting scheduled today following ministers’ comments to press in Vienna,” UBS’s Giovanni Staunovo noted, adding that after Al-Falih said Libya and Nigeria will continue to be exempt from the production curbs, the market thinks “these sources of incremental supply could reduce the effectiveness of a further extension.”
You’ll recall that on Wednesday, Citi warned that the bar for this had probably been set too high and that, thanks to Al-Falih and Alexander Novak all but confirming a 9-month extension earlier this month, there was little room for error.
Below, find a quick summary of the headline hockey and do note that moments ago, the 9-month extension was seemingly confirmed as a delegate familiar with the matter said OPEC has agreed to extend its cuts for another nine months beyond June. He did ask not to be identified because the meeting hasn’t yet concluded.
OPEC, non-OPEC nations poised to make final decision Thursday on extending their joint oil output cuts. Initial comments from ministers at opening session in Vienna suggest 9-month extension, with no change in cut size, is most likely outcome. OPEC meeting now. Non-OPEC nations join formal talks in afternoon.
- 9 months with same production level “is a very safe and almost certain option to do the trick,” Saudi Minister Khalid Al-Falih said
- Extension of that length may include option for 3 extra months, according to ministers from Russia and Nigeria
- Libya, Nigeria will continue to have no cap: Al-Falih
- Iran says it’s not asking to change its production cap; current deal allowed Iran to raise output by 90k b/d from an agreed level; content with prolonging pact for 6, 9 or 12 months, minister said Thursday