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In our weekly preview published earlier, we noted that one of the week's main events - Chair Powell scheduled testimony on Wednesday to the congressional Joint Economic Committee - was expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Friday at the age of 94.

The reason for the heightened interest in what Powell would say is that last week, Powell backed the Fed's gradual tightening but said its policy rate was "just below" a range of estimates of the so-called neutral level that neither stimulates nor cools growth. In response, stocks shot up and largely recovered November's earlier losses.

Well, it now appears that while the Wednesday hearing will be canceled, it has yet to be rescheduled, as per the following Bloomberg headlines:

  • POWELL HEARING BEFORE CONGRESS ON WEDNESDAY CANCELLED: JEC
  • JEC SAYS NO NEW HEARING DATE YET FOR POWELL

Which means that as of this moment, the key events for this week are Friday's payrolls report, which now that the Fed is suddenly ultra data dependent is once again important, and the OPEC+ summit, where things may be problematic because as Bloomberg noted earlier, Russia is suddenly a major hurdle to material output cuts:

  • RUSSIA AND SAUDIS ARE SAID TO DIFFER ON HOW TO SHARE OIL CUTS
  • RUSSIA SAID IT WOULD CUT OUPUT BY A MAXIMUM OF 150,000 B/D

Which means that if Saudi Arabia wants higher prices, it will have to shoulder the bulk of production cuts, a move which may infuriate Trump who has been instrumental in shielding MbS from global anger in the aftermath of the Jamal Khashoggi murder.

Meanwhile, Iran - which suddenly feels emboldened after Qatar announced it was going to quit OPEC - warned thatr absent a serious output cut, oil could tumble to $40.

  • IRAN OFFICIAL: OIL PRICE WILL DROP TO $40 UNLESS OPEC CUTS
  • IRAN OFFICIAL DOUBTS OPEC+ SERIOUS ABOUT CUTTING OUTPUT

Some more details from Bloomberg which quotes Iran’s OPEC Governor Hossein Kazempour Ardebili, who said that OPEC+ should cut a minimum of 1.4 million barrels a day from production to prevent a buildup of oil stocks, but its doubtful the group can reach an agreement and oil could fall as low as $40/bbl in response.

"I don’t think they are thinking to have a cut -- they may want to have excuses, or have a proposal on the table that is not grabbed by others, and say ‘OK, I told you so’,” Kazempour says in an interview

"I doubt, with failure they had in the last three months, that the declaration of cooperation gets extended. Why institutionalize a failure? And it needs unanimity to be extended.”

"Of course, Iran will not cut. Of course, no one would dare to ask Iran, because Iran’s position is very clear: So long as we are under sanctions by the U.S., we are not going to cut.”

"There is a sense of frustration prevailing, especially among small producers not at the level of Qatar, because they have lost $30 for the last three months, and this amount of money they have lost, gives them every excuse and reason to leave”

And so all eyes are now on the Saudi Crown Prince, who is facing a dilemma: suffer even lower oil prices (by cutting a token amount), or anger the US president and suffer renewed international retribution.