Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance Find Stocks Now
OPEC+ Playbook
www.investing.com/analysis/opec-playbook-200521099/
OPEC+ Playbook
By Ashraf Laidi | Apr 09, 2020 03:22AM ET Thursday's OPEC+ meeting is a major risk to the oilmarket but it's ultimately only part of what needs to happen to rebalance crude. The Australian dollar was Wednesday's top performer, while the euro lagged on growing disagreements at the EU regarding Corona bonds. US Initial jobless claims will also command attention on Thursday (more on it below). A new trade for the Premium Insight's subscribers has been issued before the NY Close.
In ordinary times, a 1-2 million barrel cut from OPEC would be major news but on Thursday the risk is that a 10 mbpd cut won't be enough. The US weekly oil inventory report showed that implied demand for crude was 14.446 mbpd last week compared to 21.86 pre-virus. That may flatter the global picture, but even at that level, it shows demand at 66% of normal. Extrapolate that globally, and it argues there is an excess of 35 million barrels per day.
Those are the types of numbers OPEC+ members and others invited to the meeting will hear on Thursday. The official talks begin at 4 pm in Vienna (10 am New York) and aren't likely to be over quickly.
Oil Barrels Maths
Algeria's oil minister said OPEC+ cuts could reach 10 mbpd on Wednesday in a headline that boosted crude 10%. Contrast that with a Russian report that hinted at a 14% cut for everyone from Q1 levels. That would be 1.6mbpd and around 4 mbpd from OPEC. Add in the extra 2.5 mbpd from Saudi Arabia since the start of April and that's still only 7.5 mbpd.
That gap could be bridged, but the OPEC meeting itself may be just the beginning. Saudi Arabia will also host a G20 conference on Friday. The risk is that OPEC cuts could have a conditional element that's taken to the G20. If so, more leaders could offer token pledges to manage oversupply but we suspect the market will sell soft commitments. Weekend risks loom large because Friday is a holiday in much of the world but draft texts from G20 meetings often leak beforehand so be on guard Thursday, especially late in the day.
Other Events
Other events to watch for on Thursday are at 1230 GMT with the release of US initial jobless claims and Canadian employment. The consensus on US claims is for another 5m layoffs with a range around 2.5m-7.5m. The consensus on Canadian employment is -500K with 7.5% unemployment. The country has already announced more than 2 million job losses so there's an element of lag here but Statistics Canada in recent reports said they're trying to adjust, so the commentary will be an important part of the report.
Related Articles
Bounce in Money Supply Growth Is Both Good and Bad News
By Michael Ashton - Apr 24, 2024
The bad news is that the contraction in the money supply appears to be over. That’s not bad news per se (see below), but it’s bad in that the anti-inflationary work...
Bulls Look to Maintain Momentum as Key Earnings, Data Loom
By Ipek Ozkardeskaya - Apr 24, 2024
Tesla's (NASDAQ:TSLA) Q1 results didn’t look good at all. The revenue dropped 9% - the first revenue drop in four years - and net income plunged by 55% compared to the same...
US Q1 GDP Growth Looks Set for Slowdown in Thursday’s Release
By James Picerno - Apr 23, 2024
4
The US economy appears on track to post softer growth in the first-quarter GDP report scheduled for release on Thursday (Apr. 25), based on the median for a set of nowcasts...
OPEC+ Playbook
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.