• 4 minutes Your idea of oil/gas prices next ten years
  • 7 minutes WTI Heading for $60
  • 13 minutes Could EVs Become Cheaper than ICE Cars by 2023?
  • 44 mins Pros and Cons of Coal
  • 2 days Pence says South China Sea Doesn't Belong To Any One Nation
  • 1 min Why does US never need to have an oil production cut?
  • 2 days Anyone holding Nvidia stock?
  • 2 hours US continues imports of Russian gas which it insists Europe should stop buying
  • 5 hours Is California becoming a National Security Risk to the U.S.?
  • 2 days Germany Discusses Lifting Ban on Deporting Syrians
  • 6 hours Regular Gas dropped to $2.21 per gallon today
  • 46 mins Warren Buffett
  • 19 hours Trump administration slaps sanctions on Saudis over Khashoggi's death
  • 2 days I Believe I Can Fly: Proposed U.S. Space Force Budget Could Be Less Than $5 Billion
  • 1 day Commission: U.S. Could Lose Wars With Russia, China
  • 2 days China Claims To Have Successfully Developed a Quantum Radar That Can Detect 'Invisible' Fighter Jets

A Hot, If Not Very Sexy, Take On The OPEC News

Refinery

As I write this piece, we are still awaiting the official announcement of the outcome of the OPEC+ meeting in Vienna, but given the organization’s penchant for controlled leaks, and given that every major news organization is reporting a million barrel a day increase in output it is fair to assume those reports are accurate. So, as always, the question is what this means for traders and investors, and how can they profit from it?

(Click to enlarge)

Any analysis of the potential impact must start with what didn’t happen. Contrary to what was said by some going into this meeting, the different objectives and needs of OPEC’s various members did not result in the breakup of the cartel. For future reference, nor is it likely to any time soon. OPEC is, despite being inherently as anti-free-market as you can get, a great example of why capitalism works. When nations as diverse and divided as Saudi Arabia, Iraq, Iran and Venezuela can come together to maximize profit it is an indication of the power of the greed that moves markets, and that power should never be underestimated.

Secondly, as this Wall Street Journal article accurately states, while the crude oil output limits have been technically raised by a million barrels a day, the reality will fall well short of that number. The main proponents of an increase, Russia and Saudi Arabia, both have the existing capacity to increase immediately, but that is not true everywhere. By dividing…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions




Oilprice - The No. 1 Source for Oil & Energy News
-->