[cityhantam]

https://oilprice.com/Energy/Energy-Gener...llers.html

How OPEC+ Punished The Short Sellers

By Tsvetana Paraskova - Apr 12, 2023, 6:51 AM CDT

In 2020, Saudi Energy Minister Prince Abdulaziz bin Salman warned he would “make sure whoever gambles on this market will be ouching like hell.”

The OPEC+ decision to announce a production cut after markets had closed and a day before the regular meeting certainly hurt any short sellers.

The short positions in Brent were slashed by a massive 46% in the week to April 4, the steepest weekly drop in data going back to 2011.


In a move officially intended to support “the stability of the oil market”, the latest production cuts from OPEC+ caught the market by surprise and threw the short sellers under the bus.

Amid the oil price selloffs following the banking sector jitters last month, top OPEC+ officials spent weeks reassuring market participants that the plunge in oil didn’t warrant any tweaks to the production cuts agreement. Until they decided it did.
A day before a regularly scheduled OPEC+ panel meeting, the biggest OPEC producers in the Middle East and several other members of the OPEC+ pact announced on a Sunday a total of 1.16 million bpd of fresh production cuts. The reduction is on top of Russia’s current 500,000 bpd cut, which was extended until the end of the year.

Saudi Arabia will cut 500,000 bpd and said that the move was “a precautionary measure aimed at supporting the stability of the oil market.”


The announcement came when markets were closed, and OPEC+ has undoubtedly bet on a jump in oil prices the moment the markets opened. Oil soared by $6 per barrel on the Monday following the announcement, the biggest single-day surge in prices in over a year.

Apart from looking to put an $80 floor under Brent Crude prices, the alliance followed through the proverbial promise of Saudi Energy Minister Prince Abdulaziz bin Salman from 2020, “I’m going to make sure whoever gambles on this market will be ouching like hell.”

The most recent data from exchanges showed a massive short covering and a renewed buying spree in oil futures in the two days after OPEC+ said it would keep another more than 1 million bpd off the market for the rest of the year.

Money managers bought the equivalent of 128 million barrels in the six most important petroleum futures and options contracts in the week to April 4, with buying heavily concentrated on the crude oil futures Brent and WTI, according to data from exchanges compiled by Reuters market analyst John Kemp.

The short positions in Brent were slashed by a massive 46% in the week to April 4, the steepest weekly drop in bearish bets in data going back to 2011, per Bloomberg’s estimates.

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[teaserteam]

Island trade pattern. Dun see price going up too high. Cut by Saudi is only 500K which can be easily replaced and filled by other countries. US is now the largest oil producer with breakeven cost of about USD44/= per barrel vs Saudi Oil r around USD 83/= per barrel. Russian oil also around USD42/=. How to fight? Saudi sure lose; good days over liao

[cityhantam]

Island trade pattern.  Dun see price going up too high.  Cut by Saudi is only 500K which can be easily replaced and filled by other countries.  

Pls learn to read carefully! 

ALL OPEC+ members also cut. Not just Saudi!

Saudi Arabia now says it will cut oil production by another half a million barrels a day.

Meanwhile, Iraq will slash production by 211,000 barrels per day, and the United Arab Emirates will decrease output by 144,000 barrels per day.

Kuwait, Algeria and Oman will also lower production by 128,000, 48,000 and 40,000 barrels per day, respectively.

[cityhantam]

The voluntary cuts start in May and last until the end of the year. Iraq will reduce its production by 211,000 bpd, according to an official statement.

The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Oman announced a cut of 40,000 bpd and Algeria said it would cut its output by 48,000 bpd. Kazakhstan will also cut output by 78,000 bpd.

Russia's Deputy Prime Minister Alexander Novak also said on Sunday that Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023. Moscow announced those cuts unilaterally in February following the introduction of Western price caps.

An OPEC+ source said Gabon would make a voluntary cut of 8,000 bpd and not all OPEC+ members were joining the move as some are already pumping well below agreed levels due to a lack of production capacity.

https://www.cnbc.com/2023/04/02/saudi-ar...-cuts.html
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[teaserteam]

Usually when there is a big short,  there will be a big buying back to cover the shorts.  They r expecting oil price to shoot back to USD$100/= but this has not happened so far and price gradually fall this week.  If OPEC+ failed to get what they wanted,  will look very bad. means shortists r in control. Will c.

[cityhantam]

Usually when there is a big short,  there will be a big buying back to cover the shorts.  They r expecting oil price to shoot back to USD$100/= but this has not happened so far and price gradually fall this week.  If OPEC+ failed to get what they wanted,  will look very bad.

Just wait and see lor! 

Be patient! 

BTW, oil demand is expected to increase!

https://finance.yahoo.com/news/oil-deman...n%20higher

[cityhantam]

https://www.cnbc.com/amp/2023/04/03/oil-...y-did.html

OPEC+ just made the Fed's job more complicated. 

The reductions will challenge consumer governments, such as the U.S., which are already tackling high inflation and volatility in the banking sector.

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[cityhantam]

https://www.qcintel.com/article/china-da...13087.html
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[cityhantam]

https://markets.businessinsider.com/news...2023-4?amp


China and India are buying so much Russian oil that Moscow's now selling more crude than it was before invading Ukraine

Russia's exports of crude oil have now surpassed the volumes hit before its invasion of Ukraine.

China and India account for roughly 90% of Russia's seaborne crude exports, Kpler data shows.

With Europe largely out of the picture, the two countries are each buying 1.5 million barrels a day from Russia.


Russia has been able to navigate Western sanctions well enough to push oil exports above levels reached before its war on Ukraine — and new data suggests that Moscow has China and India to thank for that.

In the first quarter, Russia's seaborne crude oil exports totaled 3.5 million barrels per day versus 3.35 million barrels in the year-ago quarter, the tail end of which saw the start of Russia's war on Ukraine.

China and India now account for roughly 90% of Russia's oil, with each country snapping up an average of 1.5 million barrels per day, according to commodities analytics firm Kpler,
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