(01-05-2021, 03:49 PM)EricL Wrote: I'm not convinced that this cut is voluntary.Why production would drop by same amount over next 12 months? Market is speculating for economies to open up then the demand should go up.
Saudi's have had rig count and spending cuts just like everyone else, and may not be able to produce what they claim. Rig count has been cut in half since Q1 of 2020, and oil production has dropped by ~1.5 MMbpd already. Wouldn't it be likely that production drops another similar amount over the next 12 months?
They save face by announcing a "surprise" million barrel per day cut, impact the crude price by doing so, and then hide the fact they can't produce as much as previously touted.
Still bullish here...
Still cut means Saudis see further drop in demand? Why? Unless your theory is right that they are not able to ramp up quickly which. I really doubt is the case.