The Deal -- April 12, 2020

Updates

April 14, 2020: spin -- Saudi says crude oil supply could drop by 20 million bopd -- twitter -- obviously trying to support oil prices. No way will crude oil supply drop 20 million bopd. Saudi couldn't even get Mexico to deep cuts by more than 100,000 bopd. I didn't read the linked article over at twitter, but I assume they talked about US shale, etc. 

April 14, 2020: analysis over by Simon Watkins. Consider the source, but there are some interesting observations. For me, the light bulb just went on. Quick: name the country run by a king with a huge fortune in oil. Now, quick, name a country run by a king with a huge fortune that has no military.

Original Post

This is the WSJ report regarding the OPEC+ deal, at this link. I think it's fascinating. Talk about everyone getting hung up on 100,000 vs 400,000 bbls of oil per day (Mexico), and not one mention of the actual production quotas for the other 22 members of OPEC+.

Oh, I suppose that data is in there somewhere, and there will be other sources, but for those who have little time to read each day and whose main source of such news is only The Wall Street Journal ... well, what can I say?

My hunch is that there will be supporting / additional articles in The WSJ  that will break down the specifics of the deal. Whatever.

Just an observation. I honestly don't know what Saudi's production limit is under the new deal but I haven't look very hard. The best I could find in this article:

In addition, Saudi Arabia, the United Arab Emirates and Kuwait have agreed to cut a combined two million barrels a day above their quota, Iranian Oil Minister Bijan Zanganeh said in a televised interview.

Exactly what does that mean? And why is that coming from the Iranian oil minister and not from the OPEC secretary?

Again, whatever.

And then this:

The U.S., Canada, Brazil and the other Group of 20 leading economies that aren’t part of the OPEC alliance will hold back four million to five million barrels a day, OPEC said in a draft press release.

Canada wasn’t asked to impose production cuts on its oil producers, said Sonya Savage, energy minister for Alberta, Canada’s largest oil-producing province. Instead, the decrease will come through market forces, as companies tend to cut production voluntarily when prices drop, she said. 

Say what? Is that a joke, or what? Canada's cuts will come through market forces but the cuts in the US won't? Say what? That would suggest that Lynn Helms (ND) and the Texas Railroad Commission are about to impose limits on Bakken and Permian production, respectively. I wonder what North Dakota senator Kramer will have to say about state-imposed cuts in oil production? Has the US nationalized US oil companies?

How much will Norway cut back? How much will China be asked to cut? China is producing about four million bopd. Is China exempt, as they are also exempt from the Kyoto protocol?

Wow.

Anyway, for the time being, this will be where I track "the deal."