I posted on weekend developments here: Weekend oil - OPEC heads towards supply cut extension
In the comments Cheung asked if there could be deeper cuts?
It's a question oil analysts are asking:
- In theory, OPEC could try to surprise the market by announcing deeper cuts or an even longer extension beyond March 2018
- Most analysts and traders have discounted the possibility
- Saudi Arabia and Russia left the door open by promising "to do whatever it takes to achieve the desired goal of stabilising the market and reducing commercial oil inventories to their 5-year average"
- Past experience suggests a decision to deepen the cuts would cause a sharp increase in prices in the days following the announcement but an extension would have little impact or cause prices to fall slightly
The piece is here for more; thoughts in the comments welcome!
