This is a pretty big cut. It’s not clear from the report how long the agreement is for. If it’s through Q1, that would be extra bullish.
OPEC+ is showing unprecedented unity and discipline right now but history shows there is a time bomb there and now there’s more than 5 million barrels per day of spare capacity out there. That likely caps oil near $100.
More details are coming now:
- Algeria agrees to cut output by additional 50K bpd
- Saudi to cut by 1 mbpd bpd (same amount as before via the lollypop cut)
- Russia to cut by 500k bpd
- Others to cut ‘more’