So here's my quick take on the OPEC+ deal just announced: wait til tomorrow's G20 Energy Ministers' meeting to see is there's a real deal; here's why...Business Insider reports that today's meeting "saw OPEC+ outline a deal to slash production by 10 million barrels a day (mbd)...As part of the deal, Saudi Arabia will cut daily production by 4 million barrels, while Russia will lower its output by 2 million a day. OPEC+ is also expected to seek an output reduction of 5 million a day for Group of 20 nations on Friday."
Looking at the list in the chart above of top oil producers, it’s hard to see how they're going to get another 5m/b/d from the G20. The U.S. has no federal authority to commit to specific cuts, and the other G20 countries just don't produce enough oil to add up to another 5m/b/d.
Russia and Saudi Arabia want the US to join them in cutting production, so today they agreed on their own offers of cutting 4 mbd and 2 mbd respectively, then tomorrow will ask G20 to help cut the remainder for a total of 10 mbd. Markets are asking for a total cut of 15 mbd!
Trump has threatened to put tariffs on oil imports from Saudi Arabia and Russia if they do not cut their own production. Welcome to World War Oil...