SCW NEWSWATCH & VIDEO: “Saudis and Russia Open the Oil Taps While the Market Shrugs” – Bloomberg/ Elena Mazneva/ Annmarie Hordern/ Dina Khrennikova/ Grant Smith/ Jack Farchy

Oil Wells and Sunset

“Russia and Saudi Arabia are pumping an extra 1 million barrels a day of oil and could do even more. Yet the market [has had only a muted price reaction]. After their September meeting … spurred prices to a four-year high, the world’s two largest oil exporters sought … to ease … price worries of consumers, and the U.S. president. Russia is pumping record volumes of crude … Saudi Arabia is almost there ….

… Trump has been blaming [OPEC] for rising crude prices ever since he [ended] the [Iran] nuclear agreement … and reimpose[d] sanctions. Last month, the group appeared to rebuff his calls for a rapid production increase to offset the drop in Iranian shipments, prompting a surge in prices and even harsher rhetoric. … Russia … already broke its post-Soviet production record last month [and] could add another 200,000 to 300,000 barrels a day of supply within a ‘few months,’ according to Energy Minister Alexander Novak. The oil price is … probably ‘a bit too high,’ he said ….”

Click here for: “Saudis and Russia Open the Oil Taps While the Market Shrugs” – Bloomberg/ Elena Mazneva/ Annmarie Hordern/ Dina Khrennikova/ Grant Smith/ Jack Farchy










NEWSLINK: “Revealed: #Trump’s $110 billion weapons list for the #Saudis” – Defense News

Middle East Map

“The administration’s much touted $110 billion arms proposal to #SaudiArabia, previously slim on specifics, includes seven #THAAD #MissileDefense batteries, over 100,000 air-to-ground munitions and billions of dollars’ worth of new aircraft …. #Trump’s visit to Saudi Arabia on May 20 drew headlines for what was billed as a $110 billion arms agreement. However, experts quickly pointed out that much of the deal was speculative, as any arms sale has to go through the process of being cleared by the State Department, then Congress, before going through an often lengthy negotiating period with industry. …”

NEWSWATCH: “Can Oil Rally After Russia-Saudi Pact? Cooperation reflects the squeeze on revenues and suggests that the demise of OPEC is exaggerated.” – Barron’s

Oil Wells and Sunset

Monday’s announcement of a joint Russia-Saudi Arabian working group to explore avenues for stabilizing the oil market—while short on details and immaterial for actual supply and demand balances—is another indicator of the extreme economic duress that producers are enduring, and in our view, increases the likelihood of some type of collective action if prices remain under significant pressure. We believe that the sovereign producers may eventually come to conclude that they have little to lose by agreeing to cap output when they are close to maxing out on production in the near term. Moreover, while geopolitical tensions between key producers continue to run high because of ongoing conflicts in Syria and Yemen, their leaders may yet opt for pragmatism and seek some financial relief that will allow them to keep their increasingly restive citizens content and off the streets. * * * Frankly put, OPEC producers simply do not want oil prices to fall further. Although cooperative action taken by the cartel and other key producers may prove to be more of a play on optics rather than physically actionable, at a minimum, it alters sentiment, puts a floor into the market, and reminds the market of OPEC’s capacity to co-operate. It would also prove that the prolific pronouncements of the cartel’s demise are premature.

Click here for Barron’s: “Can Oil Rally After Russia-Saudi Pact? Cooperation reflects the squeeze on revenues and suggests that the demise of OPEC is exaggerated.”