Commodity Trade Mantra

Posts Tagged ‘OPEC Oil Production’

Support For OPEC Oil Production Cut Is Increasing

With Mexico, Russia & Saudi Arabia out of the picture, the question is: who is going to decrease their oil production? There is only one entity, and that is the U.S. shale producers. Thy won’t willingly reduce output, but due to the economics of the current oil price environment, many shale oil producers will face bankruptcy next year & as a result, will go out of business.

The Worse Than 1986 Downturn In Oil Prices Has No Parallel In Recorded History

If oil prices follow the path suggested by the forward curve, and essentially remain rangebound around levels seen in the last 2-3 months, this downturn would be more severe than that in 1986. This does not bode well for everyone who has unwittingly thrown good money after bad on the assumption that the Saudis will cut production and trigger a rebound in crude oil prices.

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