Takeaway: OPEC will unfollow Trump oil tweets with cuts in 1.1 mbd range; Russia is on board for cuts; Iran adds 300 kbd more cuts from US sanctions.

OPEC NOTES DEC 6: - OPEC will unfollow Trump oil tweets with cuts in 1.1 mbd range; Russia is on board for cuts; Iran adds 300 kbd more cuts from US sanctions.

VIENNA, AUSTRIA – Good morning from Vienna where OPEC ministers are meeting to discuss production cuts for 2019 after a Wednesday afternoon tweet from President Trump.  We think OPEC will unfollow Trump on twitter and calculate cuts of about 1.1 million barrels per day (b/d).

“OPEC Notes” will be published each morning to provide a summary and analysis of key developments from Vienna.  Our last note will be Friday before the OPEC+ meeting. Please also follow our updates in real time on Twitter  @joemcmonigle.

Key Events of OPEC Week

TODAY – OPEC meeting (Press Conference schedule 1:30 PM Vienna Time)

TODAY – EIA Weekly Petroleum Status Report 10:30 AM Eastern Time (delayed one day due to former President George H.W. Bush memorial service)

December 7 - OPEC+ Ministerial meeting

 OPEC Will Unfollow Trump Oil Tweets; Russia on board for cuts. - Trump 12.5 tweet

OPEC Will Unfollow Trump Oil Tweets – Despite press coverage playing up President Trump’s tweet Wednesday urging OPEC to “keep oil flows as is”, we are told Saudi Arabia was not surprised by the tweet and may have already planned for it. As a result, we see OPEC continuing with plans to cut production at today’s meeting. However, we do expect to see some messaging from the UAE and Saudi ministers at the press conference later today about being watchful about higher prices and its customers in deference to Trump. Expect changes in messaging but not to production.

Russia On Board with Cuts– The big unresolved issue was Russia’s lack of commitment to cuts. Last night word spread that OPEC had cancelled the pre-meeting press scrum for today drawing protests from journalists. We believe it was due to Russia’s non-commitment and the need to get started early on some tough decisions. But we are told Russia got on board overnight and the press scrum was put back on the schedule. Another good sign that a deal is in the works on production cuts.

Calculating cuts of about 1.1 million b/d range for OPEC+.  We see cuts for the OPEC+ group of about 1.1 million b/d but it may not be evident until after Friday’s OPEC+ meeting and press conference.  In addition, you need to add in Iran cuts in Nov from US sanctions. For reference, we are using Platts conservative 300,000 estimate, which boosts the OPEC+ cuts to about 1.4 million b/d. How they get to this number maybe less clear or uniform but they are using 2.5% cut but there may be variations to this rule-of-thumb.

OPEC Will Unfollow Trump Oil Tweets; Russia on board for cuts. - OPEC plus 2019 Cut Estimates