01-05-2021, 03:49 PM
I'm not convinced that this cut is voluntary.
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...
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...