oil OPEC

Brent Jumps As OPEC Said To Mull Extending Cuts On ‘Worst-Case Scenario’

Oil is on the move as OPEC chatter is making the rounds.

According to the ubiquitous “people familiar with the matter,” the cartel is now debating whether to extend production cuts past the end-March expiration date.

The move could “potentially bring the curbs well into the second half of 2018,” Bloomberg says, citing unnamed officials.

Apparently, there’s a “worst-case scenario” being pondered here that would see an extension agreed beyond three months. “Prolonging the cuts will be necessary if OPEC output remains at current levels, which have been boosted by returning production from Libya and Nigeria, the people told Bloomberg.

That pushed Brent over $54, although Michael Hewson, market analyst at CMC Markets, calls it “just fluff designed to put a floor under the oil price.” Right, Michael – that’s what jawboning is. Anyway, here’s the move:


Meanwhile, we also got OPEC’s latest monthly report moments ago and they’ve now boosted their estimates for what they’ll need to supply next year by 400k b/d to 32.8m b/d, a level that Bloomberg notes is “in line with group’s production last month, meaning OPEC would be unable to reverse its current output curbs.”

Here are some other highlights from the report:

World oil demand growth in 2017 is expected to rise by 1.42 mb/d after an upward revision of around 50 tb/d. The adjustment mainly reflects better-than-expected data from OECD region for the 2Q17, particularly OECD Americans and Europe, as well as China. In 2018, world oil demand is anticipated to grow by 1.35 mb/d, an increase of 70 tb/d from the previous report. This reflects higher growth expectations for OECD Europe and China.

According to secondary sources, total OPEC-14 crude oil production averaged 32.76 mb/d in August, a decrease of 79 tb/d over the previous month.


That m/m decline in OPEC production looks notable as it would appear to be the first decline since April and it looks like it’s driven by a big fall in Libyan output.


0 comments on “Brent Jumps As OPEC Said To Mull Extending Cuts On ‘Worst-Case Scenario’

Speak On It

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Skip to toolbar