Yesterday we were looking at the OPEC announcement to cut crude oil production by 500 M Bbls/d, and the subsequent announcement that Saudi Arabia would maintain its voluntary and additional 400 M Bbls/d production drop. Just to show how difficult it is to gauge reality from rumour, there were strong noises coming out that earlier, Saudi Arabia and Venezuela had actually proposed a 500 M Bbls/d increase, even though this was of course strenuously denied.
There’s nothing like an incident to spark price movement. Thursday morning’s suspected attack near the entrance to the Persian Gulf have stoked, not only fears of a military confrontation between the U.S. and Iran, but also the oil price, up as high as 4.5% on early trades. This just seems a few hours after all the talk was about oil prices sinking 4% on the back of faltering demand.