OPEC++ delegates received a stark message from the OPEC Secretariat today: do nothing and be overwhelmed by demand collapse and supply wave or take production cuts to try to manage oil markets.
"The huge global oil imbalance calls for immediate, broad and effective action, by all responsible producers," OPEC Secretariat told delegates in a slide during a report on current oil crisis. OPEC's Secretariat sees the average daily oil demand decline of 6.85 million barrels per day (b/d) in 2020.
Hedgeye forecasts that OPEC is targeting a cut of about 10 million b/d for the 2nd quarter with the cut amount reassessed at the June OPEC meeting. As we said in our flash call for clients on Wednesday, there was an effort to increase the cuts close to the 15 million b/d number that Trump tweeted last week. We would not be surprised to see Saudi Arabia announce a shock-and-awe type cut number in response to Trump and try to put a floor on prices.