To The Moon

WTI has given up its overnight gains... again... after the now standard leak headlines "from an anonymous delegate" spooked the market.

Most members are reportedly giving support to a one-month extension, but the outcome isn’t decided and delegates say there aresome countries that would prefer to increase production.

“The situation is not clear yet," one delegate cautions.

OPEC+ nations are discussing not just what to do in May, but also about the next few months.

Oil demand is expected to grow significantly during the northern hemisphere summer. It will also grow in the Middle East, where countries like Saudi Arabia consume vast amounts of crude to run power plants harder and meet air-conditioning demand. So,as Bloomberg's Javier Blas notes, wemay have a two-pronged OPEC decision, with one message for May and another one for June and after.

And the delegates are nowdebating a proposal for gradual output hikes.

This sent WTI back below $60 and into the red for the day...

As Bloomberg's Julian Lee notes,in theory, the group can make three more increases of 500,000 barrels a day before it has restored the full 2 million barrels that it originally planned to return in January. But Russia and Kazakhstan have already had most of their shares of that increase. Russia’s target can only increase by another 115,000 barrels a day and Kazakhstan’s by just 18,000 barrels until they’ve had their full shares of the original increase of 2 million barrels a day.

That’s going to mean they’ll soon have to watch others getting increases they don’t share in, or that the others will have to agree to lift Russia and Kazakhstan’s shares of the group’s collective output - something that’s always been difficult for OPEC in the past.