In this briefing, the host provides a rapid market commentary on the extreme oil price volatility that followed the recent OPEC+ meeting. He walks through a price chart, highlighting a 6% drop after Putin’s comment, a 10% rally on meeting optimism, and subsequent swings tied to news of production cuts. The speaker details the tiered cut proposals—10‑12 million barrels per day (mbpd) for May‑June, 8 mbpd for July‑December 2020, and 6 mbpd for January‑April 2021—while noting that the cuts may need to deepen if COVID‑19 demand shocks worsen. He cites an OPEC source indicating Saudi Arabia and Russia will each cut 23% from their 11 mbpd baselines. Regulatory antitrust concerns in Texas and Alberta are flagged as potential obstacles, with Texas regulators meeting on April 14. The host emphasizes the political role of the United States, suggesting President Trump could be a decisive “kingmaker” in the final agreement, and warns of a possible 15‑20% price drop when markets reopen after the Good‑Friday G20 energy ministers meeting. Technical trading insights are offered, describing how pivots and daily lows serve as exit points for fast‑money traders. The briefing concludes with a reference to energy journalist Amina Bakar for further insight and a wish for a safe lockdown weekend.
Chapters
Okay, so just wanted to have a quick catch-up. It's just gone 6:30 London time now, Thursday, 9th of April. So, um, from the last kind of catch-ups that I've done, this is now kind of post the bulk of the main OPEC meeting. But yeah, I've just annotated a chart here so you can see just a pretty insane price movement on the back of an OPEC meeting. OPEC meetings are notoriously volatile We know that, but this is quite exceptional. I mean, if you actually think about the ranges here, that first move lower when Putin said he had no plan to talk to Trump in Saudi Arabia, this came around midday London. We actually fell about 6%, then we actually rallied about 10% on the back of then the actual OPEC meeting beginning, and then talks of positive vibes on the discussion, and then this talk about 20 million cut on the table. That was obviously way bigger than expected, and And then we actually got up and had a retest on the weekly Monday and the R2 on the daily pivot high for them being rejected. More volatility. Then it was kind of headlines pertaining to a deal of only $10 million. We dipped again. Then it was talking about this deal would only last for 2 months, which was a bit of a disappointment. Markets were perhaps expecting longer. The range of duration of cut, regardless of size, was more kind of 3 a minimum, up to 1 year or end of year as a maximum. And certainly 2 months, bit disappointing. So we dipped again, volatile, and now we've just broken through the initial daily low, and that's just added to a little bit of price movement. That, that line there, that earlier low, pretty much coinciding of course with the $25 handle as well, probably just helping exacerbate some of the price movement. But this is just how incredibly volatile oil is. In these conditions. We looked at the ladder previously. The market's very thin, particularly now given the time of day, and we've just soared through that, you know, a straight 60-cent almost break there on the break of the daily low to hit that. And again, this is that fast money type of targeting I was talking about in the briefing, if you caught that this morning. When the market kind of breaks a key technical level, there's a fundamental catalyst, markets look for the first possible exit from these kind of speculative traders. And then the pivots always provide a good logical point of exit to scale out of trades or close a position, given the fact that all traders would have the same exact pivot point levels on their chart because they're derived from the previous day's price kind of volatility. So yeah, exactly happening to the same situation here, and then quite a wicked bounce back up. But let me run you through some of the latest headlines since we last spoke. And the lady that's probably in the know the most at the moment is Amina Bakar. So if you don't follow her, I strongly recommend that you do because we've not, we've not finished yet with the energy commentary. We've got the G20 energy ministers meeting tomorrow, of course. She is Deputy Bureau Chief for Energy Intel, but she's an ex-Reuters energy correspondent, and she is right on the money at the moment. She's kind of your Laura Kunzberg of Brexit, if you like. I'd say like-for-like comparison. The latest discussion at the and perhaps reason behind a little bit of the dip. A couple things. For one, um, this is what they'll discuss now: a 10 to 12 million barrel per day cut from May to June. Now if you think about it, the expectation when we were up at that high north of $28, now we're sub-$25. Earlier they were talking about 20 million and people getting super excited, jumping on the back of that, chasing some of that upside momentum. But obviously 10 to 12 is kind of welcome back to reality type of situation. Very much then a reflection of this moving goalpost of expectations. And as they were talking things up, obviously the bar goes up, and so now 10 or 12 is a bit of a disappointment. The other things here to supplement that commentary is, um, and then an 8 million barrel per day cut from July to December 2020, then a 6 million barrel per day cut from Jan '21 to April '22. So actually, from a timeline perspective, Yes, it's 2 months for the 10 to 12, but then they're going to do this graduated kind of easing, if you like, of the severity of the cut. So I think that in a sense is a good rational approach. It's just whether or not that these figures being 10, 12, 8, and 6 are going to be enough to counteract then the demand shock that we're seeing with COVID-19 at the moment. Don't get me wrong as well, these quotas could well be subject to quite severe changes depending on the future development of the coronavirus. Of course, if that gets worse and we see, I don't know, exponential growth continue in the US beyond expectations, or a second large wave in China which offsets then expectations around mainland European hotspots, then I'd be expecting then these cuts are going to have to get deeper because the demand shock gets all the more worse. Um, this is one of the other headlines as well, just to put it in context. OPEC source says both Saudi and Russia will both cut 23% from their 11 million barrels per day baselines. I guess that's the kind of initial headline, and then this provides some of the details about how they're going to approach it over the longer term. So the other thing to mention here, I was just chatting to some of the guys on the, the Squawk desk, and they were highlighting the fact that watch sit on Texas and Alberta in Canada because they have regulatory framework issues in the fact that it breaks antitrust laws, particularly in America, if they were to be part of conversations about cutting supply or at least coordinating with other companies in order to do so, to achieve that, that goal. And so legislation needs to change. And so this is quite a key thing. And Texas regulators are meeting on the 14th of April. The 14th of April is not until next Tuesday. Now that's interesting from a date point of view because the G20 energy ministers are meeting on Friday, Good Friday. So quite unusual, quite unprecedented to meet on what is a pretty much a global holiday. Markets certainly are closed, so the price movement when, when it shuts today is pretty much all we're going to see until the reopening of trade next week. But Perhaps the strategy here would be Trump needs to be fairly tight-lipped and not really say too much. The back of that being that really he, as I talked about in the briefing, the actual, the value of the price of oil being so low at the moment is being to detriment of these kind of smaller, more independent oil and gas firms in America to be able to operate anyway. So they've already had to cut back production because of the fact that it's not actually, um, monetarily effective to produce at these low levels. It's a loss leader. And so therefore, naturally, production in the US is already going to come down, and some estimates are for around 2 million. So for Trump, I would say it could be that he sits on his laurels a little bit tomorrow, and he really is the deal breaker. Although there are other countries like Canada, Brazil that are going to be important, there are lots of others But Trump really is the kind of kingmaker here on how the deal inevitably either succeeds or folds. And I wouldn't put it past him at this point. It seems like Saudi and Russia tentatively have managed to make some kind of peace together agreement, but it only takes Trump to come in and try and reassert his dominance, let's say, and the whole thing falls apart again. And we could be in for a real quite nasty gap down in prices by another 15-20% at the reopening of trade next week. We shall see. But hopefully makes a little bit more sense. It's just generally wrapping things up. Let me just move back to the chart. I did tweet this earlier, so if you wanted to have a look at it again, then you can do so. So that's it. I'm gonna— hope you enjoyed the session. Wish you a great long weekend. Please be responsible with your isolation, if you like, or lockdown. I know it's going to be amazing weather, but hopefully you can keep it real and for the benefit of everyone. And then I'll see you healthy, sound of mind, ready to go next week when we recommence the briefings. Thanks so much, guys.
