The Daily Dose; We got this, OPEC committee says

-Balance is coming

-Biden plays hardball with Iran

Members of a committee monitoring OPEC-led production restraints said Wednesday they were optimistic that 2021 would be a year of recovery. Markets during the previous session rallied on news that Saudi Arabia made good on a pledge to trim another 1 million barrels per day in production, adding to what other players already promised. Elsewhere, EIA gave something of a mixed bag, with products increasing and crude oil posting a gain. In the geopolitical arena, we’re seeing the Biden administration put pressure on Iran as the market waits for signs of a breakthrough on nuclear negotiations.

The price for Brent crude oil was up about 1% as of 2 p.m. ET to trade at $58.44 per barrel, marching ever closer to the psychological threshold of $60 per barrel.

The Joint Ministerial Monitoring Committee met Wednesday for their regular monthly assessment of market conditions since restraint agreements were clinched last year. The group boasted of compliance, saying its members were doing more than required. Both Iraq and Kazakhstan, meanwhile, agreed to make up for past lapses.

“The committee noted that since the April 2020 Ministerial Meeting, OPEC and non-OPEC countries have adjusted oil production down by a cumulative 2.1 billion barrels, stabilizing the oil market and accelerating the rebalancing process,” its press statement read.

That’s been part of a growing consensus that demand streams were recovering enough to eat into a glut. Weekly data from the US Energy Information Administration showed a drain in commercial crude oil inventories, but a notable 4 million barrel build in gasoline levels. That build will likely continue into next week given the late arrival of severe winter weather east of the Mississippi. For gasoline, EIA data show the four-week average for gasoline inventories is still about 10% above what it was this time last year, but for crude, the overhang is closer to 4%, suggesting there’s more too it than just mobility data.

On the geopolitical front, we’ve been expecting a breakout from the likes of Venezuela and Iran now that Joe Biden is in the White House. He served as vice president while the Obama administration was coaxing Iran into a less-rogue fold and at a time when Venezuela was among the largest oil exporters to the United States. We would expect the Biden to court Tehran first, but the government is not backing down on pressuring Iran for its malign activity. The Justice Department on Wednesday filed a so-called forfeiture complaint alleging the MT Achilleas (IMO: 9458494) was involved in the illicit transfer of Iranian oil. The complaint serves notice to the Iranian military, which is suspected of playing a role in the shipments, for its continued use of the nation’s oil to finance terrorism. For Biden, that’s hardly an olive branch.

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