In Energy

Ho hum – OPEC extended production cuts that were originally agreed in December 2016 for another 9 months, delivering both OPEC members and Russian discipline that will last well into the Spring of 2018.


Ho hum?!?!? Just another day in the global oil marketplace?!?!


Well, to hear it from the oil analysts out there —- yeah.


According to most analysts, the market is disappointed, expecting even more than 9 months and even deeper cuts. Really??


Look at this from Goldman, preparing already for a replay of oil gluts ………………in late 2018.


And this, from Bloomberg’s oil geopoliticist, Leonid Barshinsky – about how big a MISTAKE it was for the Saudis to change course in December, shoring up production and starting the global rebalancing process.


Sheesh – can’t a Cartel get an even break?


I, for one, have marveled at how the Saudis have managed to put together, and HOLD TOGETHER, this strategy for regaining control of global oil pricing. Five years ago, we’d be suspiciously betting — not on WHETHER production quotas were going to be cheated on, but WHO would be FIRST.


Now, compliance is above 95%, everyone, including Iran (!!) and Iraq (!!) are completely on board – and there is a historic new deal between OPEC and the Russians.




The suspicions of 95% of oil analysts are that this arrangement cannot last – and they have good historical precedent to believe that.


They’re wrong.


When it comes to the oil markets, always believe the Saudis. They say what they’re going to do, and then they do it. In my 30+ year career in oil, I’ve always profitably banked on it.


I could tell you a story of how they ‘predicted’ triple digit oil in 2003, long before we got anywhere near there – and guess what happened?


In 2014, they told the world they were going to flood the markets, fight for market share and try to bury US shale players. They did that.


Now they’re saying they’ll ‘do what it takes’ to stabilize oil prices and shepherd them higher. They’ve made a historic effort to reassemble the cartel and included some other unlikely partners in their reemergence to control supply.


Believe them.


Have a look at this video of another oil trader/analyst – who believes that oil has done it’s time in the $40’s and won’t see that level again, gaining momentum as it continues to make it’s way upwards.


Smart fellow – good looking too.


I think he’s right. My next EnergyWord webinar will focus, as it always does, into turning these energy market insights into actionable ideas. PLEASE NOTE: the next webinar is being rescheduled for TUESDAY June 6th at 4PM, instead of the usual Monday. PLEASE MARK this change in your calendars – and join me by clicking here.