OPEC to announce details of their production cuts

[dan_s]

Investor's Business Daily: OPEC Is About To End This Big Mystery As Crude Oil Resumes Collapse
GILLIAN RICH at 11:52 AM ET

Crude oil prices continued falling Thursday over worries of slowing economic growth, but OPEC reportedly plans to release detailed member quotas as well as deeper production cuts to stop the decline.

After OPEC and partners like Russia agreed to curb crude oil output at their meeting earlier this month, they didn't release quotas for individual countries. That lack of detail and the meeting communique's fuzziness raised concerns that participants could fudge any commitments to cut.

But OPEC will release by the end of this week a detailed table with each country's quota, Secretary-General Mohammad Barkindo wrote in a letter to OPEC members and partners, according to Reuters.

The letter also states that countries will reduce production by 3.02% to meet the 1.2 million-barrel-per-day cut, up from the 2.5% agreed on during the meeting. The deeper cut is needed to offset Iran, Libya and Venezuela, which were exempt from the cuts.

"I would urge Your Excellencies to kindly make positive announcements reinstating your countries' commitment to implementing the agreed decisions," Barkindo wrote. "This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment."

Crude Oil Prices Continue To Drop

The news from OPEC failed to hold back another sharp drop in oil, as markets continued to worry about excess supply and weakening demand.

The Fed rate hike Wednesday and plans for two more Fed rate hikes in 2019 also spurred fears that monetary tightening will cool growth and depress crude oil demand further.

Brent crude oil prices fell 2.6% to $55.75 per barrel. U.S. crude oil prices tumbled 3.7% to $46.55.

Exxon Mobil (XOM) fell 0.7% to 70.32 on the stock market today. Fellow Dow Jones Industrial stock Chevron (CVX) dipped 0.1%. Royal Dutch Shell (RDSA) rose 1.1% to 57.53. BP (BP) was up 0.6%.

Crude oil prices had rallied Wednesday after Saudi Energy Minister Khalid Al-Falih told reporters that he's sure that the OPEC meeting crude oil production cut will be extended in April.

Why OPEC, U.S. Companies Need Higher Crude Oil Prices

The drop in oil prices puts OPEC member's budgets under pressure. Saudi Arabia, Iraq and others rely on oil revenue to fund their governments.

Kuwait would be the only Middle Eastern OPEC member to cover its 2019 budget with Brent at $55, according to Bloomberg.

Before the OPEC meeting earlier this month, President Trump wanted to put pressure on the cartel to not cut production to keep gasoline prices lower for U.S. consumers.

But lower oil prices aren't just weighting on Middle Eastern oil producers.

U.S. shale exploration and production companies have cut back drilling operations. Diamondback Energy (FANG) and Parsley Energy (PE) announced they were scaling back activity for 2019.
-------------------------------
"Low oil prices cure low oil prices". At least that is the theory.