Capital Calls: Angola and OPEC 21 Dec 2023 Concise views on global finance: The African state’s decision to quit the oil producer group isn’t a huge deal in the short term, but will raise fears of more meaningful exits.
OPEC+ is a weird club for Brazil to want to join 30 Nov 2023 Latin America’s largest economy is mulling joining the 23-strong oil producer group. But OPEC+’s latest 2 mln barrels of daily cuts are not needed to balance the market, will rile the US at a sensitive time, and may increase internal strife. It seems more like a club to leave.
US linkup with Saudi could cause OPEC shift 10 Oct 2023 Spiraling conflict in the Mideast could spur tougher US sanctions on Iran. That might lead to a US-Saudi rapprochement. Power, then, moves away from the rest of OPEC. Saudi is in a tough spot, but the US could grow even mightier in the fossil fuel market.
Capital Calls: Saudi oil gambit 6 Sep 2023 Concise views on global finance: The world's top crude exporter is extending its 1 million barrels a day production cuts until the end of 2023 to boost prices.
OPEC’s oil sweet spot may not last long 11 Aug 2023 Crude prices have risen some 20% since the cartel and Russia extended supply cuts in June. The spike owes much to falling inflation and hopes of a soft landing. Yet risks around China and US growth persist, and seasonal demand will soon fade. Oil producers may need to do more.
UK is in danger of becoming the Nigeria of wind 20 Jul 2023 Ex-PM Boris Johnson wanted Britain to be for green energy what Saudi Arabia is for oil. Yet Vattenfall is halting a key offshore wind scheme, and it’s not clear if the UK will let developers hike prices to offset soaring costs. The more apt OPEC comparison is output-hit Nigeria.
Peak oil is another reason to shun OPEC club 26 Jun 2023 The oil-producing organization wants Guyana to join, but the tiny South American nation prefers to pump while it can. Cartels are difficult to maintain at the best of times because members can cheat. When future demand is finite, there’s even less incentive to cooperate.
Saudi oil cuts collide with investor scepticism 8 Jun 2023 The Gulf state is slashing oil production in July and convinced OPEC+ to extend cuts to the end of 2024. In this Viewsroom podcast, Breakingviews columnists explain how these restrictions may still not be enough to convince investors to stop worrying about recession.
Saudi’s oil lollipop reflects its sticky situation 5 Jun 2023 The kingdom has secured OPEC+ consent to extend output cuts into 2024, and will also lop another 1 mln barrels off its own daily production. But if traders bought OPEC’s demand forecasts, oil prices should be higher anyway. Saudi may also struggle to slash output any further.
Oil’s feuding forecasters may both be wrong 15 May 2023 The International Energy Agency, which represents developed-world crude buyers, recently slammed producer club OPEC’s output cuts. Yet the pair share the same demand estimates for 2023. If they’re wrong, IEA fears and OPEC hopes of surging oil prices may prove wide of the mark.
OPEC’s oil cut is less surprising than it looks 3 Apr 2023 The producer group’s shock call to slash output by another 1 mln daily barrels will annoy Joe Biden and spur inflation fears. But de facto leader Saudi Arabia had already shown it would ignore US wishes. And Chinese demand is sufficiently uncertain to justify pre-emptive action.
Oil’s 1970s parallels overlook key difference 23 Feb 2022 Crude prices are nudging $100 a barrel, the highest in more than seven years. Geopolitical tensions, tight supply, and high inflation invite comparisons with 1973, when oil costs quadrupled. This time, however, OPEC is more likely to ease a crisis than exacerbate it.
OPEC gets closer to a Wizard of Oz moment 2 Feb 2022 When the curtain fell back, the fairytale character’s powers proved bogus. The cartel’s ability to steer crude prices rests on the market believing it can boost production. Challenged members like Angola make that tricky, raising the risk oil prices soar higher still.
Capital Calls: Chinese hacking, Tencent 19 Jul 2021 Concise views on global finance: When the only response to China hacks is harsh words, companies will pay the price; the $680 billion technology giant places a heavyweight bet on UK gaming group Sumo.
OPEC spats are less important than its sweet spot 6 Jul 2021 The UAE stymied a deal to unwind oil output cuts. That will further strain relations with Saudi Arabia, but Riyadh will probably find a compromise. Meanwhile, the cartel and its allies have unusual scope to keep crude prices high without losing market share to U.S. producers.
Jay Powell’s oil price bet counts on green inertia 3 Jun 2021 The Fed boss and his peers expect rebounding energy costs will only temporarily lift inflation. But if Western oil majors cut capex to please investors, crude could grow more expensive in coming years. Rate-setters are implicitly banking on a more gradual eco-friendly shift.
Oil price supercycle could be super short 8 Mar 2021 Crude spiked above $70 a barrel, regaining pre-virus levels. It could climb even higher given OPEC is holding back supply and global policymakers are stimulating economies. But if lofty prices encourage production by those outside the cartel, they may not last that long.
Corona Capital: Tesla, OPEC 2 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Tesla speeds past its traditional rivals, and OPEC’s next meeting shapes up to be a bruising encounter.
Cox: Windfall-tax Covid-19’s sweepstakes winners 27 Apr 2020 Leaders are justifying bailouts saying the pandemic is “nobody’s fault”. By that logic giants like Amazon gaining ground as small firms collapse were handed unequal advantages by states. Tariffs such as those imposed on oil drillers after OPEC’s embargo could level the field.
Flaky oil output cuts will favour Saudi Arabia 15 Apr 2020 Supply curbs brokered by the United States make President Donald Trump look like a big winner. But the deal isn’t robust and won’t lift crude prices enough to prevent some U.S. shale producers from going bust. Riyadh could end up with a bigger market share once the dust settles.