Yesterday, as oil prices were tumbling to fresh 2022 lows despite a major hot war taking place and collapsing energy CapEx which virtually assures a crippling energy crisis in the next 5-10 years, we asked if OPEC+ would “wait until tomorrow to drop the output hammer or will they go today.”
Well, they waited until tomorrow, because moments ago Reuters reported that following recent media reports that Saudi Arabia and Russia would likely cut output if Brent drops below $90, OPEC+ dropped the trial balloon of what comes next:
- RUSSIA WILL LIKELY PROPOSE OPEC+ REDUCES OUTPUT BY AROUND 1 MLN BPD AT NEXT MEETING – SOURCE FAMILIAR WITH RUSSIAN THINKING
And since most other OPEC+ sources will agree with Russia, oil has spiked with WTI surging more than 3% from $77.8 to just shy of $80.
And while Biden is still draining the SPR at an accelerated pace to minimize the Democrat rout in November, oil will likely fluctuate for the next two months at which point it will explode higher as the new post-SPR drain reality finally kicks in.