The Russians are playing hard to get and in a global market that is focused on economic slowdown concerns, that is very bearish. Oil traders were assuming that OPEC was ready to agree to a production cut today, but now the Saudi oil minister is saying not so fast. The Saudi Energy Minister Khalid Al-Falih reportedly told reports in Vienna that no agreement had been reached on output cuts, and that members did not want to "shock the market" with significant changes in the cartel's current baseline. He said that cutting output by around 1 million barrels would be enough. He also said that non-member allies, such as Russia, are not willing to make similar decisions, "we will wait until they are".

The Russians in the past have shown that they are willing to go along with a cut, but they won’t say how much or when they want to implement it. That is not good for prices against a backdrop of a very nervous economy. The market wants at least a 1.3-million-barrel cut!  I think the Saudis want that as well, but they want Russia to take about 300,000 barrels a day of that. 

The Russian oil companies are pressuring President Vladimir Putin to not cut. The Russian oil companies are making money and can afford lower prices, but most OPEC members cannot. This gamesmanship comes as global markets are fearing that the U.S. China trade war is heating up and that could reverse the decision by China to buy U.S. oil.

Overnight markets tanked on the arrest of the daughter of Chinese technology company Huawei’s founder. The arrest of Meng Wanzhou, 46, who is Huawei Technologies Co Ltd.’s chief financial officer, raised concerns that the U.S. China Trade truce could be coming to an end. Reuters is reporting that Huawei is already under intense scrutiny from the U.S. and other western governments about its ties to the Chinese government, driven by concerns it could be used by the state for spying. The Chinese government is calling for an immediate release. The U.S. is also alleging that the company skirted sanctions and was selling technology to Iran and North Korea. The market shakeup continued as Reuters said that it threatened to inflame Sino-U.S. trade tensions afresh.

Remember we get the EIA report today! The API was a bearish mess showing crazy builds across the board and if the EIA agrees then we could be in for more downside. Yet OPEC can save this market, especially if they come back with what might be a 1.4 million barrel a day cut. Believe it or not, despite the comments from the Saudis, that cut might be closer than you think and the Russians will soon be on board.

Geopolitical tension between the U.S. and Russia are running high. Fox News reported that a U.S. Navy warship sailed in waters, claimed by Russia in the Sea of Japan, on Wednesday as tensions increase over the Trump administration’s decision to withdraw from a decades-old arms control treaty. A spokesperson for the U.S. Pacific Fleet says the guided-missile destroyer USS McCampbell sailed “in the vicinity of” Peter the Great Bay, a body of water off the Russian port city of Vladivostok, “to challenge Russia's excessive maritime claims and uphold the rights, freedoms and lawful uses of the sea enjoyed by the United States and other nations”.