OPEC+ Looks to Continue Status Quo in Short-Term
November 18, 2020
The average estimates for today’s DOE inventory update are calling for crude to be up 1.179 million barrels, gasoline up 62,000 barrels and distillates down 1.961 million barrels.
The API report released yesterday said the crude oil stocks were up 4.2 million barrels and the crude stocks at Cushing were also up 1.6 million barrels. Gasoline stock were up 256,000 barrels and distillates were down 5.0 million barrels.
Reuters average outlook for today’s DOE report. Crude up 1.7 million, gasoline up 87,000 barrels and distillates down 1.5 million.
Bloomberg estimates for today’s DOE report. Crude up 1.179 million, gasoline up 62,000 barrels and distillates down 1.916.
The OPEC+ compliance committee met and did not make any specific recommendation to the group for the official meeting at the end of this month. It appears that they will take a wait and see attitude with the current market sentiment and production cuts will get extended at least 3 months. Saudi Arabia’s Energy Minister, Price Abdulaziz bin Salman, called on fellow OPEC+ members to be flexible in responding to oil market needs as it builds the case for a tighter oil production policy in 2021 to offset weaker demand amid a new wave of the coronavirus pandemic. OPEC+ is considering delaying a plan to increase output by 2 million bpd or 2% of global demand in January to support the market. Saudi Arabia has indicated that it wants a tighter policy in 2021 to draw down inventories still increasing since demand fell this year. However, other large producers, such as Iraq, have failed to deliver fully on promised cuts and have signaled they want some leeway to produce more oil next year.
Russia’s Deputy Prime Minister, Alexander Novak, said Russia will stick to its obligations under the deal with OPEC on oil output cuts. He also stated that the oil market has reached stability thanks to joined global efforts.
European Central Bank President Christine Lagarde warned that a key challenge facing policy makers is stopping the current economic crisis from morphing into a financial crisis. “We need to stay really clear of that,” Lagarde said.
Estimates for today’s propane inventory update is for stocks to decline by 1.3 million barrels. 5 year average for this reporting week of the year is a decline of 1.171 million barrels.