OIL MARKETS SERVICE

Group strategy is likely to become more fluid, with the first tranche of voluntary cuts unwound this month. Yet the group will still likely take a more cautious approach, even with its consistently bullish view of demand. Its upcoming meeting, to be held among voluntary cut participants, may be used to open discussions on when the group can confidently begin unwinding its next phase of 1.66 million b/d voluntary cuts. A pause could follow if market conditions are not seen as conducive to short-term tapering, but we see any reversal of its new strategy to regain market share as unlikely.

The potential for US interest rate cuts and ongoing strikes on Russian energy infrastructure helped buoy crude futures Tuesday.