Nigeria, Venezuela Announce Cutbacks Totaling 0.6% of OPEC Productin – Big Deal
Posted by zmann on September 30, 2006
My 2 cents on the Opecies cutting today is that it highlights the lack of real sponsorship in the cartel for a meaningful cut. You’ve got rebel plagued Nigeria cutting 120,000 bopd (5% of their total) and perma price hawk Venezuela, cutting 50,000 bopd (1.9%). Combined this represents 0.6% of OPEC’s production in the most recent month. Wow, better run out and fill up the Prius. Come on Chavez, that doesn’t even reflect the Big Gulp sized hit you took this week, you wanta be Putin looking chump. BTW, that’s a pretty strong message: Mess with Bush and you get fired from 7-Eleven. How does Rove get this stuff done?
When the Saudis step up to the plate and turn the spigot to the right on 1mm+ bopd then I’ll be convinced they’re willing to fight this tooth and nail all the way back to equilibrium. Even then, I don’t think that will halt the slide, just delay it some, making your favorite group of puts all that much more irresistable.
In the near term traders are praying, on their knees, that a giant Canadian high pressure system invades the US and sits on us ASAP. Looking at the major consuming regions of both gas and oil for heat, that’s not forecast through at least Oct 15. In fact, the South is headed back to the low 90s this weekend and Boston/NY will be balmy (for those guys)