Daily Oil Fundamentals

The Bark Seems Worse than the Bite

27 Sep 2024

The Bark Seems Worse than the Bite

The impact of yesterday’s report by the Financial Times on Saudi Arabia preparing to unwind 2.2 mbpd of voluntary cuts must not be exaggerated. It must be taken at face value. It was the confirmation of a pre-agreed deal. It is the timing that was curious as the change in Saudi/OPEC+ strategy comes as Brent is trading sub-$80. Adding around 180,000 bpd per month for 12 months starting in December will loosen the oil balance and probably lead to global stock builds in 2025.

Daily Oil Fundamentals

Prioritizing Market Share

26 Sep 2024

Prioritizing Market Share

Given the economic and fundamental backdrop, yesterday’s sharp sell-off was somewhat perplexing. Central banks started to lower interest rates, which was a confident sign that recession had been avoided. China’s tacit admission of failing to revive its economy and the resultant introduction of monetary stimulus was greeted with an audible sigh of relief.

Daily Oil Fundamentals

Focusing on $80

25 Sep 2024

Focusing on $80

Following last week’s rate cut by the Federal Reserve yesterday was the turn of the Chinese central bank to reassure markets that it is doing whatever it takes to revive its economy. In the broadest stimulus measure since the pandemic, it announced a reduction in borrowing costs on mortgages of up to $5.3 trillion, together with alleviating restrictions on second home purchases, lowering repurchase rates and banks’ reserve ratio requirements.