RE: General mkts recovering ...26 Nov 2018 12:47
A small recovery in the PoO today appears to have helped the sp. Very noticeable is the rise for PMO who are arguably more at risk.
MGW in his blog refers to a bad day (obviously last Friday) and goes on to say "Finally, ahead of the Opec+ meeting next week the thought that the KSA may have been turned by the USA and won't cut back by the necessary volumes is a legitimate concern to the market."
The concern is not that they won't cut back but by how much.
If KSA limits it cut back there is no way Russia will take up the slack; they are bound to cut no more than the Saudis, if not less. The inevitable result is that the market will perceive the supply/demand imbalance is still there and the price decline will continue, with a return to the lows of 2016 a very real prospect.
The Saudis cannot be so stupid as to not realize this so will they pander to Trump or prioritise their economy.
G20 starts Friday and hopefully we shall see some signals