Oil: Long Brent on outsized cheapening post-US NFP, Saudi Aramco output cuts (others to follow)

Oil: Long Brent on outsized cheapening post-US NFP, Saudi Aramco output cuts (others to follow)

Adding to our tactical short USD view this week, we add a long Brent oil position. Brent oil price has not yet recovered after an outsized sell-off last Friday post-US NFP-driven Dollar strength.

News overnight (Bloomberg, 9 Oct-17) about Saudi Aramco's supply cuts is not only a bullish headline (cuts above and beyond add credibility to OPEC output accord) but - importantly - it has the potential to coax other producers to signal similar output cuts before the annual meeting in Vienna (30 Nov).


  • Saudi Aramco to cut 560k bpd in customer allocation from Nov to supply 7.15mbpd (v 7.7mbpd demand), expects others to follow

  • Saudi Aramco supply cuts for Nov = full 290k bpd reduction over/above 486k bpd that it pledged as part of OPEC accord (total 800k)

We watch two key monthly events tomorrow (Wed, 11 Oct) for positive news on demand outlook:

  • EIA releases monthly short-term energy outlook (STEO, link)

  • OPEC monthly market report (link)

  • Calgary Energy Roundtable

Entry: 55.80

Target: >56.87 (14dma)

Stop: <55.1 (9 Oct-17 low)

Time horizon: 1-2wks

Visual: Brent oil (-1mth)

Visual: Brent oil (-6mth)

#oil #saudi

Featured Posts
Recent Posts
Search By Tags
No tags yet.
Follow Us
  • Twitter Metallic


Email: strategist@emgist.com

Disclaimer: All communication on EMgist.com is provided for information purposes only, it is general in nature and does not take into account the objectives, financial situation or needs of any person. You should consider whether it is appropriate for you and seek independent advice before acting on it. EMgist.com is not acting in an advisory or fiduciary capacity and all communication is not an offer or recommendation to buy or sell any product or enter into any transaction. EMgist.com does not guarantee the completeness or accuracy of any information presented on this site. You should do your own independent research before making any decisions.