OPEC+ Cut May be Too Brief: Reuters

OPEC+ oil output cut of 2.2m b/d in Q1, including 1.3m b/d of rollover cuts, may be too short-lived to tighten supply, traders told Reuters.

• "A continuation of these cuts into the Q2/Q3 might be required for the (Nov. 30) meeting to be viewed bullishly," Macquarie analysts said.
• The time lag required to implement the cuts mean the market sees insufficient evidence of the cuts’ effects to factored into prices. When the first data indications of the cuts arrive in late January, the market will be close to trading April contracts.
• Physical markets may show earlier signs of tightening, Reuters added. However, WAF crude markets, often the first reflection on changing sentiment, have weakened. Middle Eastern markets have also followed in weakening.
• "There is an abundance of oil available, which is neatly reflected in the contangoed structure of the two pivotal crude oil benchmarks," said PVM’s Tamas Varga.