OPEC exceeded the market’s expectations this week by creating a plausible deal to reduce output to 32.5m bpd with broad participation (10 members will cut, Libya and Nigeria are exempt from cuts while Iran can grow output by 90k bpd to 3.8m bpd) within the group in addition to help from Russia. Whether or not the group sticks to their plan to reduce supply remains to be seen, but for now OPEC has succeeded in 1- increasing the floor for spot oil prices and avoiding another painful, FX reserve burning trip into the low $40s, 2- protecting their ability to talk prices higher and 3- bringing time spreads closer to backwardation with the market seeing an accelerated rebalance. Following WTI’s rally from $45.25 on Tuesday to just shy of $52 on Thursday we are maintaining our medium term oil outlook of $47-$55 WTI continuing to see […]