Volkonski wrote: ↑Mon Sep 26, 2022 11:47 am
Russia's oil production cut backs have not been enough to support crude oil prices at a level desired by OPEC.
Expect OPEC production cuts soon.
It's interesting that they're trying to keep oil above $90 in this environment. IIRC, Saudis are profitable when oil's above $60, and they typically love it when the price is above $60 but below Russia's breakeven point, which used to be around $80 or so, so they can put the hurt on Putin. I suspect that Russia's breakeven point is going to be higher going forward as they try to keep their far eastern fields running; they're dependent on Western technology for that and will have to spend up massively to try to get stuff on the black market (if they even can). And the closing of European pipelines means they'll have to discount for shipping costs in tankers (if they can even get oil out of ports in the Baltic or Black Sea areas).
I haven't followed the oil market in any detail for many years, but I would suspect that if Chinese demand is lower than expected, they're trying to start cuts early so they can have everybody ready to help them defend a $60 price. It doesn't require much decline in demand (maybe 5% or 6%) to go from $90 to $60, which happened in the wake of the 2008 global recession. It certainly doesn't take a 30% drop in demand.