Did OPEC Cut?

Today OPEC members met in Vienna. The meeting took on an elevated level of importance due to the statement issued by OPEC in its most recent gathering agreeing in principle to cut production but deferring all details surrounding such an output cut to today’s meeting. As one would expect, in the days leading up to today’s meeting, rumors and leaks by various OPEC members buffeted the market. At the end of today’s meeting, OPEC proudly announced that its members agreed to a plan to cut 1.2 mb/d from production. The financial media had its headline - the market took the new as bullish and the price of crude (both WTI and Brent) rose during the day in excess of 10 percent. We provide our observations and assessment of today’s events below.

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