It looks like we have a deal!
After days of speculation and a whole lot of aggressive rhetoric and brinksmanship from the Iranians, OPEC looks to have the basis for a deal on a production increase.
According to a delegate, the agreement (in principle) calls for a nominal 1m b/d production hike. Again, that’s in nominal terms and in line with reports from earlier this week, the actual increase will amount to something on the order of 600k b/d.
That would entail a return to 100% compliance with production quotas – again, that sounds like it’s in line with some of the previous reporting. Here are some of the bullet point highlights:
OPEC COMMUNIQUE: CONGO HAS BEEN ADMITTED AS AN OPEC MEMBER
OPEC COMMUNIQUE: OIL MARKET SITUATION HAS IMPROVED
OPEC COMMUNIQUE: MEMBERS WILL STRIVE FOR 100% COMPLIANCE
OPEC COMMUNIQUE: JMMC WILL MONITOR COMPLIANCE WITH TARGETS
OPEC COMMUNIQUE IS SAID TO EXCLUDE ANY MENTION OF SANCTIONS
IRAN MINISTER EXPECTS OUTPUT INCREASE OF LESS THAN 700K B/D
OPEC’S PRESIDENT MAZROUEI: DIFFERENCES BETWEEN OPEC MEMBERS
OPEC PRESIDENT MAZROUEI: 100% COMPLIANCE WILL RETURN STABILITY
MAZROUEI: OPEC WON’T PROVIDE ANY INDIVIDUAL NATION ALLOCATIONS
IRAQ: OPEC DEAL MEANS `PRACTICAL ADDITION’ TO MKT OF 770K B/D
OPEC REAL OUTPUT INCREASE OF 700K-800K B/D AGREED: IRAQ MIN
OPEC PRESIDENT: OPEC WILL TARGET COMPLIANCE AT GROUP LEVEL
The news comes after a tense day of talks on Thursday and some conciliatory remarks (or what counts as “conciliatory” in this context) from Zanganeh on Friday following a heart-to-heart with Al-Falih.
now everyone will say they got just what they demanded.
ZANGANEH: 100% COMPLIANCE `WHAT I WANTED FROM MOMENT I ARRIVED'
— Heisenberg Report (@heisenbergrpt) June 22, 2018
The “real” figure is lower than what the Russians were aiming for and I guess this is some semblance of bullish, all things considered.
The question now is how long it will take for noted commodities strategist David Dennison to deliver his quick take on the deal.
Oh, and don’t forget that this usually doesn’t work when it comes to quickly arresting rising prices: