Saudis began to carry out OPEC + in advance: How do oil prices react?

US, WASHINGTON (ORDO NEWS) — Saudi Arabia began to reduce production last week, Bloomberg reported this with reference to senior sources over the weekend. The country did not wait for the formal start of the OPEC + transaction and began to implement it, however, it is worth saying that in order to fully fulfill the obligations it was necessary to prepare the infrastructure, so there is nothing unusual here.

Earlier, other OPEC countries also reported a decline in production. Nevertheless, on Monday morning, prices for “black gold” are reduced. A barrel of Brent mix loses in price by more than 5% and costs $ 20.6, while WTI becomes cheaper by 12% and costs a little more than $ 15.

At the same time, stock markets are growing steadily. Futures for US indices add more than half a percent. Optimism is associated with hopes for a speedy lifting of quarantine and revitalization of the economy.

Over the weekend, European countries reported a minimum monthly mortality rate from COVID-19, and the United States also showed positive dynamics: the number of hospitalized in New York also turned out to be minimal for more than a month.

Returning to oil prices, it is worth saying that Brent contracts expire this week and this factor will probably refuse to affect prices, however, the repetition of the history of a week ago, when WTI futures went deep minus before expiration, should not be expected.

Brent contracts have no delivery obligations, which minimizes the risk of price chaos.

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