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by Stockwatch Business Reporter
West Texas Intermediate crude for July delivery briefly crossed $40 for the first time in three months before retreating and closing at $38.19, down $1.36, on the New York Merc, while Brent for August lost $1.50 to $40.80 (all figures in this para U.S.). Western Canadian Select traded at a discount of $8.10 to WTI, unchanged. Natural gas for July added one cent to $1.79. The TSX energy index added 2.66 points to close at 94.99.
The unprecedented production cuts announced by OPEC+ will stay in place an extra month. After several days of wrangling, the members of OPEC+ agreed on Saturday to maintain 9.6-million-barrel-a-day cuts during July, rather than tapering off to 7.7 million barrels a day as previously planned. They also promised to enforce stricter compliance. Members that failed to comply with their share of the cuts during May and June will have to make extra sacrifices from July to September, said Saudi Energy Minister Prince Abdulazis bin Salman during a virtual press conference today. He added sternly that OPEC+ has "no room whatsoever for lack of conformity." (For reference, data compiled by Bloomberg pegged the compliance rate in May at about 77 per cent, dragged down by habitual cheaters such as Iraq and Nigeria, which respectively honoured just 42 per cent and 34 per cent of their cuts in May -- and this was actually better than usual.) The Saudi Energy Minister declined to specify what would happen if cheaters continued to flout their quotas. He would only say that countries must police themselves.
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