Daily Memo: OPEC+ Delays, Japan Mobilizes

Russia and Saudi Arabia have signaled that a dialogue is happening.

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OPEC+ pause. Saudi Arabia and Russia have delayed an OPEC+ meeting intended to negotiate production cuts. Instead of meeting on Monday as promised, the oil cartel will meet Thursday. The delay caused a significant drop in oil market prices; Brent crude fell more than 3.2 percent and U.S. crude fell 3 percent, with prices for the latter sitting between $25 and $27 per barrel. Both Saudi Arabia and Russia said the delay was caused by “technical reasons,” but market experts have speculated that the two countries wanted to hold backdoor discussions to establish common ground before opening talks up to all OPEC members and allies. Both countries have signaled that dialogue is happening, and the head of Russia’s sovereign wealth fund, Kirill Dmitriev, said they are “very, very close” to a deal. Russia and Saudi Arabia favor different outcomes: Moscow wants to cut production using the first quarter’s average as a baseline, while Saudi Arabia wants to use its April production as a baseline, since the kingdom has produced more than 12 million barrels per day compared to an average of 9.8 million bpd from January to March. Ahead of the meeting, a number of OPEC stakeholders have argued for […]

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