Oil is riding a strong risk mood and signs that OPEC+ members are following through on their pledged output cuts. The cuts took effect from May 1 but early signs showed high exports from Russia and many were skeptical they would play along, creating a risk of a fracturing cartel. Today though, Russian energy minister Novak confirmed that they've cut production and secondary data is also showing slowing production.
RBC also argues that Saudi Arabia could come in under quota:
Saudi crude production has rebounded above 10.8 mb/d after falling below 10 mb/d in the first two months of the year and trailing its supply quota by 400 kb/d on average since November. This would indicate that the real physical effect we see in May, on a m/m basis, would come in above the announced 500 kb/d for the kingdom.
On the chart, there may be a double bottom in place for oil and that's helped by spec positioning that extremely negative along with low global inventories and the potential for some SPR barrels to be refilled. A double bottom would be confirmed by a rise above $85 but that's $13 away so in the interim, the market will be looking to see if oil can get above $75 on a closing basis.