Being ambivalent about the oil market today, I thought why not write an article about it.
I have mixed feelings about the energy market for three reasons: Firstly, leaders like MBS have failed to strengthen the oil market conditions.Secondly, OPEC meeting and consecutive production cuts couldn’t stabilize the oil market. Finally, the upcoming meeting of OPEC and NON-OPEC countries will be innocuous to the short sellers.
I don’t want to be impertinent but I’m not the only one who is ambiguous. Equivocal statements by energy ministers across the world show that they are more ambivalent than me. In particular, Russian promises of production cuts only belie the internal production boost because after ruble decline over the past years the Russian economy is too weak to cut production. Russia’s contradictory statements,(about cutting production) before and after the OPEC meeting, have created a mercurial mood, obfuscating the market.
We’ve come to an era where OPEC and Gulf aberration don’t drive the market but shale producers of the states do.Iran and Iraq support the cuts in production but demur when the due date comes closer (which is not unfair because both these countries have been suffering for long due to the export ban).
The lifting of the ban has caused a restive production boost. All big hedge fund traders have been waiting for the OPEC involved meeting. I hope this meeting will be auspicious for the oil market. OPEC may galvanize Iran and Iraq for a cut in production.
The time has come to forget the acrimony. After all, Iran and Iraq are major producers of oil.
Back in 2015, I attended the lecture of Subramanian Swami, a Harvard economist. In 2015, Swami had predicted a Republican victory, saying that most of the Wall Street lean towards the US Republican Party (which supports oil prices).This made sense because till 2015, 10 oil drilling companies had filed for Chapter 11 and Democrats had not done anything about it. He proved right when in 2016 Donald Trump won the US Presidential Election. However, almost 6 months into his presidential term, even Trump has not done anything about oil prices.
Maybe the oil drillers have made their peace with shale oil companies.