Update: Saudi Arabia has categorically denied reports that it is negotiating with other OPEC countries to increase production by 500,000 barrels a day, according to the kingdom’s state agency

Oil Plunges After Report On OPEC+ Production Increase

The first question that comes to mind (as oil already tests multi-month lows) is – why would they do this?

The Wall Street Journal reports that Saudi Arabia and other OPEC oil producers are discussing an output increase, the group’s delegates said…

An increase of up to 500,000 barrels a day is now under discussion for OPEC+’s Dec. 4 meeting, delegates said.

The move would come a day before the European Union has said it would impose an embargo on Russian oil and the Group of Seven wealthy nations’ plans to launch a price cap on Russian crude sales, potentially taking petroleum supplies off the market.

Any output increase would mark a partial reversal of a controversial decision last month to cut production by 2 million barrels a day at the most recent meeting.

The reaction was swift and obvious as WTI tumbled $2 back to a %77 handle…

We are sure it just a coincidence that this report hits days after the Biden administration grants immunity to MbS over the brutal assassination of reporter Jamal Khashoggi.

Even WSJ admits it is an unusual time for OPEC+ to consider a production increase, with global oil prices falling more than 10% since the first week of November.

…quid pro quo, indeed.

Mon, 11/21/2022 – 09:26

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