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Crude Higher, But Moderating on OPEC+ Activities

OPEC+
  • Crude is edging higher although down from a spike up to over 78.6$/bbl after Saudi Arabia pledged an additional 1mbpd voluntary production cut in July.
  • The move came after the weekend OPEC meeting at which other members pledged to extend existing cuts until the end of 2024. UAE secured a higher quota for next year as the lower targets for Russia, Nigeria and Angola represent little change in actual output with targets brought into line with current production levels.
  • Near term crude time spreads have gained with the Saudi production cuts adding to the expected supply deficit in the second half of this year. The prompt Brent spread has rallied after falling back to near parity last week but the WTI prompt spread remains in contango due to weak demand. Longer dated spreads are seeing some support from the adjusted 2024 OPEC target levels.

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