Displaying items by tag: OPEC

(Shanghai)

China is one of the biggest importers of crude oil and…see the full story on our partner Magnifi’s site

(New York)

Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials…View the full article on our partner Magnifi’s site

(Houston)

Unprecedented freezing temperatures across the south have wrangled most news headlines this week. This is causing a not so surprising collapse in production from the major U.S. manufacturers in the state most affected, Texas. But the lack of demand from refineries is creating a negative pull on oil prices as they are slower to adjust to changing conditions. Sluggish oil prices will be expected to continue despite a 3.5 million barrel shortfall in production because the refineries aren’t in high demand. On top of this demand shortfall, OPEC has announced plans to ramp up production. These combining factors have produced about a 2% decline in WTI crude futures after declining 1% in trading last Thursday. Finally, the Biden administration has set the course to re-engage with the 2015 Iran nuclear agreement, however, Trump-era oil sanctions have not been reversed.

FINSUM: The run-up in oil prices over the last two weeks was driven by inclement weather in the U.S. but look to the finer details of global production in the next couple of weeks to push oil prices back down. Examine related sectors, like the airline industry, to capitalize on these fluctuations.

(Houston)

The oil market has been the story of the week for markets. The price of black gold fell to -$37 dollars on Monday. The market would technically pay you to take oil off its hands. Even at $20, most of the US oil industry is out of business, so what can the President and the government do to save the market? There are several options. For instance, the government could buy a hundred million barrels of oil for its strategic reserve, or it could create new storage space. However, the option the markets favor is for the government to buy mountains of oil while it is still in the ground, and have producers pay them back as they extract it.

FINSUM: If the government wants to save the US oil industry from a mass bankruptcy—and resulting rupture in the high yield market—it will need to take action.

(Houston)

The sole bright spot in markets today is the big jump in oil prices. US oil rose about 10% earlier today on an announcement by President Trump that a deal between Russia and Saudi Arabia was close. The two parties have ben locked in a price war, which alongside the virus, has conspired to bring oil into the teens from a high of around $63 per barrel in January. Trump says a deal could happen within a “few days”.

FINSUM: Oil hit an 18-year low this week. In our opinion it is only a matter of time until oil producers come to an agreement to try to fix prices higher.