Higher In Asia As Potential For OPEC Supply Cuts Raised

WTI and Brent are ~$0.90 firmer apiece, extending a rebound off their respective troughs made on Monday, with participants in Asia reacting to news of potential oil output cuts by Saudi Arabia in the near-term.

• To elaborate, Saudi Energy Minister Prince ABS on Monday brought up the possibility of cuts to OPEC+ production quotas at the group’s next meeting (early Sep), citing “extreme volatility” in crude futures as a key reason.
• Keeping to OPEC+, RTRS sources reported that the group missed collective production targets for July by ~2.9mn bpd (corroborating Argus source reports from late last week), with the gap between stated quotas and actual production continuing to grow.
• Elsewhere, crude exports from the Caspian Pipeline Consortium’s (CPC) Black Sea terminal remain partially suspended due to damage to loading facilities. Output through the pipeline during Aug-Sep is nonetheless likely to “significantly down” (as per earlier CPC statements), due to scheduled maintenance work at major Kazakh oil fields.
• Turning to ongoing U.S.-Iran nuclear talks, the Biden administration has yet to formally respond to Iran’s comments re: the EU’s “final draft”, with evidence of concrete progress towards a deal remaining scant as the two sides traded accusations of procrastination on Monday.