One day after Al–Falih managed to jawbone crude sharply higher by promising cuts to Saudi crude exports next month, oil is on the move again.
WTI and Brent both spiked notably this morning as momentum seemed to gather steam:
“Shipments from OPEC’s largest producer will be capped at 6.6 million barrels a day on August, 1 million lower than a year earlier,” Bloomberg writes, recapping yesterday’s news, adding that “Nigeria is ready to accept a cap if production rises to 1.8 million barrels a day.”
It’s useful to pan out on the charts to see where we are versus Friday morning when the Petro-Logistics report undercut the market:
Meanwhile, the sentiment is also being underpinned by signs that US producers are finally starting to buckle under the pressure.
On Monday afternoon, we learned that Anadarko is cutting spending. That’s bad news for shale, but notable for prices:
this is probably bad: Anadarko 2Q Adjusted Loss Per Share Wider Than Estimates
— Walter White (@heisenbergrpt) July 24, 2017
shit. yep. look: https://t.co/vbXPKZz73u
— Walter White (@heisenbergrpt) July 24, 2017
Here’s the quote from the company’s Q2 results:
The current market conditions require lower capital intensity given the volatility of margins realized in this operating environment. As such, we are reducing our level of investments by $300 million for the full year.
As a reminder, this was telegraphed by company boss Al Walker. We’ve been calling for this for weeks. Here are a couple of the posts:
Of course it’s an open question whether the same market that Walker claims is serving as an enabler for the industry will reward him for being some semblance of sober.
