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Saudi "Shock And Awe" Sparks Buying Panic In Crude - WTI At 17-Month Highs
12-11-2016, 10:52 PM,
Saudi "Shock And Awe" Sparks Buying Panic In Crude - WTI At 17-Month Highs
Saudi "Shock And Awe" Sparks Buying Panic In Crude - WTI At 17-Month Highs

<p>Despite Saudi Arabia <strong>pumping record amounts of crude</strong>, the energy complex has spiked 6% higher tonight after two major headlines. First, Russia and other non-OPEC nations agreed to join the OPEC pledge to reduce production; and then, in what some are calling their &quot;whatever it takes&quot; moment, <strong>Saudi Arabia surprised the market by saying it will cut more than previously agreed</strong>.</p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Saudi Arabia will &ldquo;cut substantially&rdquo; below the target agreed last month with OPEC members</strong>, Energy Minister Khalid Al-Falih says.</p>
<p>Al-Falih&rsquo;s comments follow a deal by non-OPEC countries to join forces with the group and trim output by 558k b/d next year, the first pact between the rivals in 15 years.</p>
<p><em><strong>&ldquo;This is a very powerful message that producers want to balance the market higher,&rdquo; </strong></em>says Chris Weston, chief market strategist in Melbourne at IG Ltd.<em><strong> &ldquo;As a statement of intent, this is about as bullish as it gets&rdquo;</strong></em></p>
<p>Oil spiked up to its highest since July 2015...</p>
<p><a href=""><img height="340" src="" width="600" /></a></p>
<p>and perhaps most worrying for those inflation-watchers, is up 55% YoY...</p>
<p><a href=""><img alt="" src="" style="width: 600px; height: 306px;" /></a></p>
<p><em><strong>&quot;This is shock and awe by Saudi Arabia,&quot;</strong></em> said Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London.<em><strong> &quot;It shows the commitment of Riyadh to rebalance the market and should end concerns about OPEC delivering the deal.&quot;</strong></em></p>
<p>The question is - what happens next? How long can the Saudis keep jaw-boning the market higher in true central bank-inspired 'forward guidance' before 'investors' get wise to them not actually cutting production?</p>

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