OPEC+ Expected to Extend Supply Cuts
March 1, 2024
OPEC+ is expected to announce soon that they plan to extend their supply cuts through Q2 2024 or through the end of the year. OPEC+ continues to say what they can to support prices, but are they performing on these cuts, that is debatable. It was reported the OPEC+ produced 26.42 million barrels in February, up 90,000 bpd from January.
WTI is up this morning and testing near the $80 dollar resistance level. The DOE reported the fifth straight US crude stock increase this week. Inventories have now built back to about the middle of the three-year average range. US crude production is still strong at nearly 13.3 million bpd.
The Biden Administration has purchased oil for the SPR in 12 of the last 14 weeks. Although the purchases have been small the buys have supported WTI prices.
China’s manufacturers reported business activity declined in February for the 10th time in the last 11 months. The official purchasing managers index fell to 49.1 in February down from 49.2 in January.
The following is from John Kemp. US real personal income less transfer payments (PILT) are growing strongly – confirmation the US business cycle is in an upswing. Real PILT is one of the suite of indicators used by the National Bureau of Economic Research’s Business Cycle Dating Committee to identify the onset of recessions and expansions. Real PILT was up more than 3% in the three months between November and January compared with the same period a year earlier. PILT is accelerating even with benchmark interest rates at 5.25 – 5.5%.
According to Wood Mackenzie, global oil demand will increase by 1.96 million bpd this year.