Oil prices rallied yesterday with ICE Brent settling more than 1.7% higher on the day at US$72/bbl, the highest close this month. And this strength has continued in early morning trading in Asia, ING's commodity experts Ewa Manthey and Warren Patterson note.
OPEC+ monthly cuts to range between 189k b/d and 435k b/d
"The US further tightened the screws on Iranian oil exports, including sanctioning Chinese refiner, Shandong Shouguang Luqing Petrochemical Co., Ltd, for buying Iranian crude oil. The refinery’s CEO was sanctioned, too."
"The US Treasury Department also sanctioned an oil terminal in China for handling and storing Iranian oil, as well as a handful of tankers linked to a shadow fleet transporting Iranian oil. Increased enforcement of US sanctions on Iranian oil exports is an upside risk to the oil market. Iran exported roughly 1.4m b/d of crude oil in February and President Trump has vowed to drive these volumes even lower."
"OPEC+ members issued a schedule for making oil output cuts to compensate for overproduction. The cuts will run until June 2026. These monthly cuts will range between 189k b/d and 435k b/d. Importantly, they more than offset the monthly supply increases set to start in April. However, while the group shares a plan for compensation cuts, it certainly doesn’t mean members will follow it. A handful of members have consistently produced above their target production levels."
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