Oil ignored the growing closure in the Red Sea yesterday in a $5 reversal but it's now up by more than $1 after a bomb attack in Iran has left a reported 103 dead and 141 injured. Further adding to the upside was a joint OPEC+ statement re-affirming a commitment to unity.
The statement wouldn't normally be news but after Angola left the group there has been plenty of talk and rumors of a deeper split or other countries leaving. OPEC cohesion and quotas will certainly be the big story for the oil market this year.
Finally, the rally got underway after protests shut down Libya's Sharara oil field, which produces 300k bpd.
On the technical side, WTI crude oil has repeatedly found bids in the highs 60s so there's some room for optimism here, at least on a risk-reward basis.
Here's the OPEC statement:
At the outset of 2024, the OPEC Secretariat in consultation with OPEC Member Countries and the non-OPEC producing countries participating in the DoC, re-affirms the full commitment by the countries participating in the DoC to unity and cohesion, as well as their continued and unwavering efforts to maintain oil market stability going forward through the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings.
Moreover, OPEC Member Countries re-affirm their steadfast commitment to the shared objectives of unity and cohesion both within the Organization, and with the non-OPEC producing countries participating in the DoC.
The extraordinary efforts by OPEC Member Countries and non-OPEC producing countries participating in the DoC have been evident in supporting the global economy to overcome the many challenges witnessed throughout the past several years, including the COVID 19 pandemic, and have ensured stability of the oil market especially when compared to other commodities.
The unprecedented levels of cooperation, dialogue, mutual respect and trust will continue to be the basis for these continued collaborative efforts going forward. This is for the benefit of all producers, consumers and investors, as well as the global economy at large.
