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As Oil Plunges, OPEC Bans Mainstream Media Groups From Vienna Meeting

The Financial Times reports that OPEC has barred several media groups from attending its crucial production meeting in Vienna this weekend, in a move official said was driven by Saudi Arabia. Reporters from Reuters, Bloomberg News and Dow Jones, the publisher of The Wall Street Journal, have been denied invites to Opec’s Vienna headquarters, according to people familiar with the matter.

The ban is unusual and no reason has been given for excluding the media groups. Still, people familiar with the decision said it had been instigated by Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman.

If it was Russia’s intention to send oil tumbling after its oil minister last week said that OPEC+ has no intentions of cutting production, in the process inviting another round of shorts and bearish CTAs, well mission accomplished: on Wednesday oil tumbled more than 3% following the latest dismal Chinese PMI data, and followed a 4.4% drop on Tuesday the black gold is now on pace for its worst month since November 2021. But the real driver behind the latest dump is the reversal of last week’s speculation that an OPEC+ cut may be coming following a thinly veiled threat by the Saudi energy minister.

Then there are the technicals: Goldman’s futures strats estimate that CTAs are short $10 billion oil contracts, so positioning remains fairly, even though last week’s OPEC headline around warning speculators to “Watch Out” appears to have added some length early in the week, which this will is once again coming unwound after Novak’s comments.

According to Goldman, one possibility is to officialize these voluntary cuts and broaden the cuts to smaller producers. While constraints on the production of these smaller producers imply only a modest hit from a broader announcement to actual output, the bank suspects the alliance will want to signal strong cohesion.

Meanwhile, Goldman forecasts a hold for major producers because they likely first want to observe the impact of fresh cuts which just started this month (actually, they haven’t as Russia has been cutting output only verbally, while its exports remain near record high). As an aside, OPEC has never cut within three months of a previous cut with stocks as low as today.

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Zero Hedge

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