Crude oil adds to yesterday's big rebound ahead of an expected supply cut agreement later this week among OPEC and Russia: WTI +1.9% at $53.96/bbl, Brent +2.2% at $63.03/bbl.
OPEC is striving for a deal to cut production by at least 1.3M bbl/day, but the group is still talking to Russia about the extent of the reduction, according to reports.
“Russia is playing tough,” an OPEC source tells Reuters, which also reports Russian sources have indicated the country could contribute 140K bbl/day to a reduction but OPEC wants Russia to cut by 250K-300K bbl/day.
Saudi Energy Minister Al-Falih issues a cautious tone in comments to Bloomberg, saying it is “premature” to provide specifics about an agreement and walks back previous statements about the size of any supply reduction, saying the group likely will cut but still needs to “figure out what needs to be done and by how much.”
Another challenge is to bring on board Iran and Venezuela where production is already low.
Helping OPEC in reining in supply was the weekend order by Canada's Alberta province for producers to cut output by 325K bbl/day until excess crude in storage is reduced.
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