The Media Misreported Two Oil Market Stories
Colleagues,
This is a short note. Reuters misreported an OPEC+ story, causing oil price declines. For months, we've noticed timed story releases that shift oil prices. Reuters' journalists are either confused or deliberately misreporting. The OPEC+ JMMC meeting on Monday is routine and unlikely to affect markets, unrelated to voluntary cuts or their unwinding. OPEC+ V8 will meet on August 3 to set September production levels. As you all know, it was the group of 8, which we call the V8, who made the voluntary cuts and now unwinding them.
OPEC posted a tweet criticizing Reuters’ story without naming it. Here is the link:
https://x.com/OPECSecretariat/status/1948799602842374369
Here is a copy of the Reuters’ story:
Only 281 kb/d remains of the 2.2 mb/d voluntary cuts. It is unclear what the group of 8 will do, but market sentiment suggests they will unwind the entire 2.2 mb/d.
Since March, we've noted that these are "production ceiling" increases, not actual production increases. Supply (exports) increases were only a portion of the announced figures. The supply increase from March to July was 680 kb/d, while the announced production ceiling increase was 1.371 mb/d (see Figure 1). About half of the announced increases reached global markets.
Stories about a major Q4 oil market surplus exaggerate the impact of unwinding voluntary cuts. The entire industry undergoes maintenance in Q4, affecting both production and refining. Focusing solely on refinery maintenance shows clear bias.
The second misreported story from California, part of the ongoing war against the oil industry, came from a media outlet called Daily Kos.
The writer confuses "gross" and "net," mistakenly thinking "gross" is the profit refiners made. Net profit is only a fraction of gross, typically one-third to one-half, and sometimes negative.
Here is the story:
