Oil: 10% cut in production proposed – TDS

The potential for a New Global OPEC+ was raised as the Texas Railroad Commission is set to join OPEC at their coming meeting, strategists at TD Securitires apprise.

Key quotes

“Texas regulators proposed a 10% cut in production, if Saudi Arabia and Russia were to do the same (with OPEC following suit).Such an agreement would translate into a significant 4-5 million b/d cut, which would be well received by the market.”

“However, we acknowledge that it is too early to determine whether the cartel could reach some kind of deal with the Texas commission.” 

“We reiterate that a sustainable rebound in prices is unlikely in the next two months, as wide-scale travel restrictions contribute to more frequent sharp and sudden shocks to demand.”