Crude market sentiment is under pressure as OPEC sends mixed messages about its deal to cut oil output, according to Helima Croft, global head of commodity strategy at RBC Capital Markets.
The Organization of the Petroleum Exporting Countries reached a historic accord with 11 other exporters late last year to reduce total production by 1.8 million barrels a day in a bid to reduce brimming stockpiles of crude.
That lifted oil prices firmly above $50 a barrel until last week, when the cartel’s united front began to fracture at CERAWeek by IHS Markit, one of the world’s most closely watched energy industry conferences, Croft said on Monday.
“What had been sort of working against the sell-off had been OPEC having very strong message discipline. For most of the year, they just kept coming out and saying, ‘We’ve got this. Compliance is great,’ and then it starts to break down at CERAWeek,” she told CNBC’s “Power Lunch” on Monday.
Top OPEC exporter Saudi Arabia once vowed to defend the accord at any cost, but the kingdom’s oil minister expressed disappointment in Russia‘s output cuts at CERAWeek and warned that Riyadh would not underwrite other countries’ investments at its own expense.
