Headlines tell a story of more supply and OPEC discord
Crude spiked on a headline that said the majority of OPEC countries agree on the need for production.
The full text of the story is at Shana and tells a different story.
"Under current international conditions between Iran and certain Persian Gulf littoral states, it is unlikely that these countries voluntarily cut their output so that Iran can return to the global crude oil markets provided that political relations improve," director general of OPEC and energy forums in the Iranian Ministry of Petroleum Mehdi Asail said on Wednesday.
The first point is that Saudi Arabia is the only vote that matters. When other countries argue for production cuts, they're not talking about themselves. They want the Saudis to cut.
Asail is also referring to is animosity between Iran and Saudi Arabia. He then goes onto detail that Iran will increase production by 500,000 barrels per day after sanctions are lifted (we already knew this) and they will add another 500,000 shortly afterwards (that's new but not a surprise).
He continues to say that Iran doesn't need anyone's permission to boost output and that's basically everyone's attitude in OPEC. At best a little bit of jawboning is the most OPEC could provide after Friday's meeting.
WTI crude is down 94-cents to $40.90 after spiking to $41.97 on the Shana headlines.
