Meetings today:

JMMC is the Joint Ministerial Monitoring Committee. JMMC tracks the compliance of Opec+ members with their production quotas.

Back in July the group agreed to boost output by 400,000 barrels per day every month until at least April 2022. This is a gradual phase-out of cuts agreed to in 2020.

Reuters reported last week that four OPEC+ sources told them producers were considering adding more than that 400K. There were no details given on how much extra, or when supply would increase. It’d be November at the earliest most likely given the cuts in October were confirmed at the previous OPEC+ meeting.

According to 4 OPEC+ sources:

The current deal is to increase production by 400K BPD one meeting next week. The sources did not give details on a volume door which month they would to increase production.  However, one source suggested an increase of 800,000 BPD was a possible scenario for one month with zero the next month.

The nearest month the increase could take place is in November as the last agreement set the October volumes.

 

• expects global oil consumption will return to pre-pandemic levels in Q3 2022
• Asia persisting as the centre for oil-product demand growth
• 2022 oil demand expected average gain of 3.8 m bpd y/y v (down from 2021 at 5.4 m bpd)

 On the supply side of the ledger: 

• global oil output growth will probably exceed consumption in 2022
• OPEC+ and US producers will add more output

Chatter about a resuming Iran nuclear talks is combining with negative risk sentiment to weigh on oil.

WTI fell through yesterday’s low down to $69.58 as it eats further into last week’s gains.

The two-hour chart now isn’t looking great with a minor head and dhoulders top in place targeting a fall back to last week’s lows.

Oil — like everything else — is now looking to China for a read through on global GDP. In the shorter term though, it will be down to the Fed and PBOC to signal what’s next for markets.

For the update, check out the piece at the link here.

Ida in late August: