Flaring Weakness

OPEC +’s  decision to walk away from any volumetric cuts in response to a steep coronavirus-driven decline in demand did not necessarily come out of left field in spite of what you might read in the days ahead. The seemingly unrestrained production coming from U.S. non-traditional shale has long been a source of frustration for other producers who have stood by and watched the U.S. take precious market share. While they may have been comfortable piggybacking on the production discipline of others, the  irony of the  recent flaring controversy could not have been lost on the global oil players, particularly the Russians. Picture this: An OPEC meeting discussing the need for cuts in production butting up against a report last week describing the flaring of gas in the U.S. as seemingly out of control, literally restraint versus  the un-restrained. Well, in light of this weeks events, the problems of restraint seem to have been solved.