PENN WEST PETROLEUM LTD. T.PWT

Russia And Saudi Agree On 9-Month Deal Extension

[makedonka]

"Although Saudi and Russia have already announced an agreement to extend the production cut deal by 9-months, the market is simply not buying it right now. We think the bearish price action leading up to the deal will fuel the willingness of the cartel to push for a 9-month extension versus a 6-month extension. Current estimates already put global storage back to the five-year average later this year, but if the deal is extended till March 2018, the effective timeframe of the deal is actually to May 2018 due to timing of shipments. This will be a very bullish set-up for energy investors and oil bulls over the next 12-months.

 

Our base case for May 25 remains a 6-month deal extension, but the potential of a 9-month deal extension has greatly increased. The market will be surprised when OPEC meets in 10 days."

https://seekingalpha.com/article/4073413-russia-saudi-agree-9-month-deal-extension?app=1&isDirectRoadblock=false