Organization of Petroleum-Exporting Countries

Increasingly some of the more prominent sellside analysts appear to be picking and choosing ideas from their competitors. Earlier, it was JPM echoing Goldman's reco when it cut its 10Y yield forecast. Now, in a note previewing the outcome of this week's OPEC meeting and proposing a way forward for OPEC, Goldman's Damien Couravlin adopted the "backwardation" idea presented last week by Morgan Stanley's Francisco Blanch.

Global stocks were mixed to start the week, with Asian stocks higher, European stocks initially advancing then fading gains, while S&P futures are little changed after the biggest weekly drop since April (which for those keeping record was -0.4%). European shares, the euro and the pound all stumbled on Monday as rumblings in Spain, Britain and Brussels reminded investors that the region still has plenty of political uncertainty left in the tank.

The last time OPEC (and Non-OPEC) member nations sat down to attempt a coordinated increase in oil prices by cutting production they succeeded... for about three months. Every since then, oil has been on a gradual declining path, boosted by a surge in US shale output and declining global demand, with WTI recently even sliding sliding below OPEC's implicit price floor of $50/barrel. Which is why on May 25, after the failure of the first 6 month production cut, the same nations will try the same exercise, this time looking to cut output for 9 months, and hoping for a different outcome.

Authored by Nick Cunningham via OilPrice.com,

Oil prices surged on Monday after Russia and Saudi Arabia said they support an extension of the OPEC/non-OPEC production cuts. Oil prices have clawed back a lot of the losses exhibited over the past month, with Brent now safely in the low-$50s and WTI on its way toward those levels.

"Whatever it takes."

Saudi Energy Minister Khalid al-Falih and Russia's Energy Minister Alexander Novak

That's what Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak said in a statement overnight in Beijing they would do to reduce the global oil inventory overhang, using the immortal phrase coined by ECB's Mario Draghi five years ago in his successful bid to defend the euro. For OPEC, however, "whatever it takes" may not be enough.