Oil Prices in Flux While OPEC+ Remains Deadlocked on Supply

[Elderberry]

Bloomberg By Grant Smith and Saket Sundria 7/9/2021

•   WTI rises on Friday, paring first weekly decline since May
•   Crude futures advance 1.3% to $73.85 a barrel in New York

Oil prices continued to swirl as traders tried to fathom how the clash inside the OPEC+ alliance will play out in global markets.

Early in the week, U.S. crude soared to a six-year high near $77 a barrel on fears that OPEC’s failure to agree a production increase would leave markets desperately tight. But the gains soon fizzled on concern that the dispute between Saudi Arabia and the United Arab Emirates could splinter the entire alliance and undo its production cuts.

Futures advanced 1.3% on Friday, gaining in tandem with other commodities. Nonetheless, crude is down 1.8% for the week and the main focus for traders in coming days will be whether the the Organization of Petroleum Exporting Countries and its partners can repairs its split.

“The OPEC+ impasse has taken the wind out of oil bulls’ sails this week,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.

More: https://www.bloomberg.com/news/articles/2021-07-08/oil-extends-gain-as-slump-in-stockpiles-shows-robust-u-s-demand

[IsailedawayfromFR]

Always will be uncertainty and chaos within OPEC and their sometime allies like Russia as they all have competing interests save raising the price of oil.

This will be an up and down ride just about forever as these interests jockey.

[catfish1957]

As an oil company annutiant, I am in that micro micro minority that cheers higher oil prices.

One thing though....   Anyone saying they can predict the price of Brent or WTI say past 1 month, is an absolute idiot.  Oil is the most diffiucult commdity to predict, and if someone says they can...  they are lying.

But right now...  Here are the factors that as I see it will impact it in the foreseeable future.

1. Impact of demand due to  green initiatives. 
2. Impact of exploration and operations due to green initiatives
3. Will capacity adjustments dueto No. 1 or 2, overshoot demand, and price remains high.
4. Geopolitical turmoil or other operational disruptions world wide.

[IsailedawayfromFR]

As an oil company annutiant, I am in that micro micro minority that cheers higher oil prices.

One thing though....   Anyone saying they can predict the price of Brent or WTI say past 1 month, is an absolute idiot.  Oil is the most diffiucult commdity to predict, and if someone says they can...  they are lying.

But right now...  Here are the factors that as I see it will impact it in the foreseeable future.

1. Impact of demand due to  green initiatives. 
2. Impact of exploration and operations due to green initiatives
3. Will capacity adjustments dueto No. 1 or 2, overshoot demand, and price remains high.
4. Geopolitical turmoil or other operational disruptions world wide.

Access to and control of petroleum was sought by both Axis powers Germany and Japan during the last world war, mostly to power its war machines.

I believe China's goal, although more circumvent, strives for the same.

So don't look past China conquering some oil-rich nation whether within its geographic circle of influence like Myanmar or outside of it such as Venezuela or within Africa.

I am also reminded of a Tom Clancy novel of the Chinese takeover of Siberia.

This would really result in a seismic change.