Showing posts from February 28, 2021

Oil Price may hit above $70 soon: OPEC+ will not buckle under pressure

  With the latest OPEC+ decision, which was a foregone conclusion anyway in light of the enormous power that Saudi Arabia wields in the organization, the crude oil price started rocketing on Friday, despite the substantial increase in crude oil stockpiles in the US. Usually the US crude oil stockpiles is a reliable indicator when it comes to determining the price of oil; the higher it goes, the lower the price becomes. This time, however, the crude oil price defied the rising crude oil inventories while adding yet another surprise to the spectacle of crude oil price fluctuations. If the trend continues into next week, the price of crude oil, both Brent and WTI, will go beyond $70 a barrel; it will certainly be reflected at the pumps when you go to fill the tanks. In the United Kingdom, motorists already feel the significant rise in price at service stations, having been unable to put their vehicles on the roads when the price plummeted at the pumps – for obvious reasons. Worl

OPEC+ Meeting: production levels are going to remain the same with an exception for two members

  OPEC+ meeting ended on Thursday with Saudi Arabia reasserting its position as the shepherd of the block by leading the flock facing very little resistance against achieving its desired goal. Saudi oil ministers are renowned for going poetic whenever they wanted to add extra weight to the points they love to make; in this context, HRH Prince Abdulaziz bin Salman Al Saud, is no exception. At the outset of his speech he used two similies, in order to dramatize the position of Saudi Arabia to the global audience: “Let us be certain that the glimmer we see ahead is not the headlight of an oncoming express train.” This is the position maintained by Prince Abdulaziz, long before the crucial meeting on March 4; since most members agree with him at the meeting, Saudi Arabia had clearly done the homework before publicly declared its intentions; Saudi officials had persuaded the members of the OPEC not to act on impulse by just focussing on the rising crude oil price at the expense of hid

Oil Price and Production Cuts: markets watch the outcome of OPEC+ meeting

  With just less than 24 hours to go before the crucial OPEC+ meeting, oil price showed a modest increase, reflecting the general mood in the markets that supply floodgates will not open anytime soon. With the chasm between Iran and the US widening in the face of attacks on US interests in Iraq by Iran-backed rebel forces, the Iranian factors in realm of oil markets slowly pales into insignificance; Iran’s stubborn position on the nuclear deal does not make the process of sanctions being lifted any more realistic either. That means the markets will not get crude oil in excess in the current circumstances and the trend in prices reflects just that. Since a drastic output cut is not a universal view among the members of the OPEC+, they may agree on a coordinated production ‘adjustment’ until next meeting in April; this is what markets sense and hence the understandable reaction across the crude oil markets for all to see. At the same time, the more dominant members of the OPEC+ c

OPEC+ Under Pressure from Major Consumers in Asia before Meeting on March 4

  With just 2 days to go before the next crucial OPEC+ monthly meeting, the main players in the cartel are under increasing pressure not to extend their output cut for another month. India, for example, the world’s third biggest consumer, asked the organization not to resort to what it called, ‘artificial cuts’ in order to boost the price. This is not the first time that India expressed its displeasure over the production cuts by the OPEC+, as it affected the prices at pumps significantly in recent weeks; it could potentially derail the slow recovery of the Indian economy that suffered the worst recession in 70 years. Of course, OPEC+ has its own interest to pursue, having being caught up in a downward spiral of plummeting oil price. At the same time, it cannot completely ignore the grievances of its most important customers. In China, the second biggest consumer of crude oil in the world, meanwhile, there is news regarding a drop in production growth in February. If the trend

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