Equities News (March 28)
“The petrodollar was born” in 1975. When OPEC members exclusively adopted the dollar for pricing, it “had the immediate effect of strengthening the U.S. dollar,” with the greenback becoming “the world’s reserve currency, a status formerly enjoyed by the British pound, French franc and Dutch guilder.” Today, however, “we may be witnessing the end of the petrodollar as more and more countries, including China and Russia, are agreeing to make settlements in currencies other than the U.S. dollar. This could have wide-ranging implications on not just a macro scale but also investment portfolios.”
Tags: 1975, China, Currencies, Franc, Greenback, Guilder, Implications, Macro scale, OPEC, Petrodollar, Pound, Reserve currency, Russia, Settlements, Strengthening, U.S.
Oilprice.com (December 2)
“OPEC+ will meet this Sunday to discuss its production targets for January 2023, amidst a widening discrepancy between oil market watchers as to what we should be expecting next year…. The IEA’s global oil demand growth for 2023 stands at a mere 1.7 million b/d whilst OPEC expects 2.55 million b/d.”
Tags: 1.7 million b/d, 2.55 million b/d, 2023, Demand growth, Discrepancy, Global, IEA, January, Oil market, OPEC, Production targets
Investment Week (August 23)
In early August, the Bank of England predicted “increased gas prices would cause inflation to rise above 13% by the end of the year.” The consensus is worse. “Goldman Sachs and EY forecast UK consumer price inflation would reach 15%, and Bank of America projected it would peak at 14% in January.” Citi bank has gone further and “riled markets” by forecasting “UK CPI to hit 18.6% in January… beating the 1979 peak when CPI hit 17.8% following the OPEC oil shock.” A recession looks all but inevitable.
Tags: Bank of America, BOE, Citi bank, Consensus, CPI, EY, Forecast, Gas prices, Goldman Sachs, Inflation, Markets, Oil shock, OPEC, Peak, Recession, UK
Bloomberg (April 13)
“OPEC+ group of countries, led by Saudi Arabia and Russia, finally agreed to a record cut in their oil production in response to the coronavirus-triggered collapse in demand. But the deal will come under pressure when the world becomes a more normal place again.” When demand returns, “the great battle for market share between the Americans, the Saudis and the Russians will probably restart.”
Tags: Battle, Collapse, Coronavirus, Demand, Market share, Oil production, OPEC, Pressure, Record, Russia, Saudi Arabia
Reuters (March 9)
Two black swans have collided. “Financial markets have been thrown into turmoil following Saudi Arabia’s response to the collapse of OPEC+ talks and concerns about the global spread of the coronavirus.”
Tags: Black swans, Collapse, Collided, Financial markets, OPEC, Saudi Arabia, Turmoil
Bloomberg (May 2)
“Money managers turned the most bullish since May as West Texas Intermediate crude climbed to a five-month high on optimism that falling U.S. production and rising fuel demand will trim the global glut.” Their optimism may be both short-sighted and short-lived as OPEC just “boosted production by 484,000 barrels a day to 33.217 million in April, the most in monthly data going back to 1989.”
Tags: Bullish, Crude, Demand, Money managers, OPEC, Optimism, Production, U.S., West Texas Intermediate
Institutional Investor (March 2)
“OPEC members with little foreign currency reserves or alternate sources of income have been struggling to keep afloat during the global slump in oil prices.”
Tags: Foreign currency reserves, Income, Oil prices, OPEC, Slump, Struggling
Wall Street Journal (November 4)
By year end, the U.S. is likely to unseat Russia and become the second largest global producer of liquid fuels. The U.S. is now well positioned to escape the capricious yoke of OPEC and “even could surpass Saudi Arabia to become the leading global producer within the next decade.” Former Secretary of State George Schultz and FedEx CEO Fred Smith write, the nation’s leaders should “embrace both the supply revolution now well under way and the emerging demand revolution in oil-displacement technology that, together, promise a more secure and prosperous future.”
Tags: Demand, Energy security, FedEx, Fred Smith, Fuel, Future, George Schultz, Oil-displacement, OPEC, Producer, Revolution, Russia, Saudi Arabia, Supply, Technology, U.S.
