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OPEC Fights the Fed, Crude Jumps 3 Percent on Expected Output Cuts

OPEC to cut production a million barrels a day. Also, Biden blames bid oil companies for excessive profits.
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WTIC crude chart courtesy of Trading Economics

WTIC crude chart courtesy of Trading Economics

Bloomberg reports Oil Jumps as OPEC+ Mulls Biggest Production Cut Since Pandemic

Oil surged in early Asian trading after delegates said OPEC+ was considering cutting output by more than 1 million barrels a day when the group meets this week to stem a slide in prices.

West Texas Intermediate futures jumped more than 3%, advancing for the first time in three sessions. While delegates said a final decision on the size of the cuts won’t be made until ministers meet in Vienna on Wednesday, a reduction of that magnitude would be the biggest since the pandemic. 

Oil Jumps On Production Cuts

  • WTI for November delivery rose 3.2% to $82.03 a barrel on the New York Mercantile Exchange at 6:50 a.m. in Singapore. Futures tumbled 25% in the last quarter.
  • Brent for December settlement gained 3.2% to $87.89 a barrel on the ICE Futures Europe exchange.

Biden Mulls Export Limits 

To keep prices from surging in the the US (and US refiners from profiting on Europe's energy woes), Biden Officials Float Fuel Export Limit in Meeting With Refiners

Senior Biden administration officials pressed executives from some of the largest US gasoline producers to curtail overseas sales during a tense meeting Friday afternoon, suggesting that without voluntary action, the government could force the industry to stockpile more fuel in US tanks.

Energy Secretary Jennifer Granholm and other administration officials chastised the industry representatives for low diesel stockpiles, floating the possibility of export limits and a requirement for oil companies to hold minimum fuel inventories inside the US, according to people familiar with the matter who asked not be named describing the private virtual meeting.

In addition to Granholm, the session included representatives from Exxon Mobil Corp., Marathon Petroleum Corp., Phillips 66 and Shell Plc, as well as National Economic Council director Brian Deese and Amos Hochstein, a senior energy adviser at the State Department, according to a person familiar with the matter.

“The president’s team emphasized that energy companies with record-high profits, record high exports and record-low inventories must step up and bring down prices at the pump,” the Energy Department said in an emailed statement.

Administration officials stressed their concerns with increased petroleum product exports and complained companies were collecting high profits while failing to address low fuel inventories, the people said.  

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Hoot of the Day

Biden does a record drawdown of the Strategic Oil Reserves to lower prices then blames big oil companies for low inventories.

How Long Can This Go On?

This post originated at MishTalk.Com

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