Output Cut Plan Announced
Oil prices saw an old fashioned round of “Buy the rumor, sell the news” Thursday as prices dropped five dollars/barrel from early morning levels after OPEC & friends announced a 10 million barrel/day output cut plan. RBOB & ULSD futures both dropped more than a dime from their morning highs as traders seemed to emphatically vote that the deal – which still has hurdles to become reality - was too little, too late, to offset the drop in global demand.
Markets around the world are closed today for Good Friday, with no energy futures trading or spot market assessments.
G20 Oil ministers are meeting (virtually of course) today to discuss joining in with output cuts to try and balance the markets, and perhaps to put pressure on hold-out Mexico to get on board and avoid killing the OPEC deal.
Basis values came under heavy selling pressure this past week as U.S. physical players seemed to signal that the optimism in futures markets didn’t have much room in their tanks, suggesting we could see more downside to prices next week and more retail stations offering gasoline for less than one dollar/gallon.