OPEC: Iran was Never Expected to Cut ProShares Ultra DJ-UBS Crude Oil(NYSEARCA:UCO), Proshares Trust II (NYSEARCA:SCO)
Iran is not expected to actually cut production, nor were they expected to by our models.
Instead, the offer being put to IRAN looks something like this according to our understanding:
- Cut by 4%, but only from a higher level.
- That level is the all-time high of 3.97 mbd
- That puts IRAN's production cap at 3.81 mbd
- That's 120K barrels more than their last production report.
Iran is not expected to cut, but OPEC can call it a cut and IRAN can, at the same time, tout victory and suggest they won the negotiation and are allowed to produce more.
IRAN was never expected to cut from their last production report data.
Oil prices have been declning on news that IRAN will not cut and oil related ETFs like ProShares Ultra DJ-UBS Crude Oil(NYSEARCA:UCO), Proshares Trust II (NYSEARCA:SCO), United States Oil Fund LP (ETF) (NYSEARCA:USO), and iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) have been impacted, but the news is being misinterpreted..