OPEC officials were to meet last week, but this looked from the beginning it was going to be a disastrous meeting. It was postponed to this week, and the outcome was very unclear, with markets turning bearish eventually on Crude Oil. WTI failed to reach $80 after the initial spike on output cuts news, and then reversed back down close to $75.

Despite the virtual format, comments from OPEC kept coming out. They eventually provided a production cut, albeit it wasn’t obvious how much, and traders were not happy with the ‘voluntary’ nature of the cuts. There were rumours for a 2.1 billion barrel cut, but ended up to around 1.8 billion, which is doubtful.

The Production Cuts for Each Country

• Saudi Arabia: 1 million BPD
• Russia: 500,000 BPD
• Iraq: 211,000 BPD
• UAE (United Arab Emirates): 160,000 BPD
• Kuwait: 135,000 BPD
• Kazakhstan: 82,000 BPD
• Algeria: 51,000 BPD
• Oman: 42,000 BPD

If the Russian and Saudi Arabian cut extensions are excluded, the around 680K barrels per day. That falls short of expectations, but it’s certainly more than was projected a few weeks ago, so we saw a jump higher at first, before the prices began to fall. The Oil market reacted negatively to the reduction, although it did try to jump, with WTI crude reaching $76.80, up from $75.05 at the lows, before pulling back down and closing the day below $76.

US WTI Crude Oil