Saudi Arabia will push for an extension to OPEC oil output cuts through mid-2020 - WSJ

Ross J Burland FXStreet

Saudi Arabia will push for an extension to OPEC oil output cuts through mid-2020, an effort to prop up Aramco’s IPO share price, officials say in the Wall Street Journal.

Lead paragraph

Saudi Arabia will push for an extension of oil-production cuts through mid-2020 at a producers’ summit this week in an effort to prop up Saudi Aramco’s initial public offering share price, Persian Gulf officials said. But talks over boosting compliance to agreed cuts—a key condition for the kingdom to deepen its efforts—are being overshadowed by growing unrest in the Middle East.

Market implications

Last week, the Saudi comments that they were no longer willing to compensate for OPEC cheaters roiled markets. However, comments over the weekend from Iraq suggesting OPEC+ will consider deeper cuts, in the area of an extra 400k bpd, have been also supporting the market. with Saudi Arabia looking to push for an extension to OPEC oil output cuts through mid-2020, WTI can remain better bid. WTI is currently trading 1.30% higher at the time of writing, having travelled from a low of $55.2 to a high of $56.65. "So long as WTI prices remain below $56.50/bbl, trend followers are set to target a net short position once again," analysts at TD Securities argued.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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