Venezuela and Nigeria have announced they will cut oil production by as much as 200,000 barrels a day. OPEC members have spoken publicly about possible supply cuts in the face of oil's recent correction towards $60, but no formal agreements have been made yet.
It seems the decision by Venezuela and Nigeria to pare back supply has left some OPEC members "furious". However, the Financial Times and Reuters report that several OPEC nations, Saudi Arabia and Kuwait among them, are quietly cutting back supply as well.
An excerpt from Reuters' article:
The world's eighth-largest exporter Nigeria will cut supplies by 5 percent from October 1 after consultations with other OPEC producers, while some other countries in the exporters' club have already trimmed sales, acting Secretary-General Mohammed Barkindo told Reuters on Thursday.
A senior Nigerian oil industry source told Reuters that Nigeria was joining Saudi Arabia, the world's biggest oil exporter, and Kuwait in an unofficial deal to pare oil supply.
Since the crude oil price drop began, the story they've been talking up is an oil "supply glut". Even the Reuters' headline stresses this angle. It seems everyone is bearish and counting on OPEC to come on with added supply at any time. The assumption made by many analysts, including those quoted in the articles, is that they can. Is this assumption unfounded?
More on this to come.