OPEC

Capital Calls: Chinese hacking, Tencent

19 July 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 July 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 June 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 March 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 July 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 April 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 April 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.

Corona Capital: Oil cheerleading, Mortgaging Ford

13 April 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. and Saudi energy ministers agree on pumping up oil, Ford may use an old trick to raise new capital.

Big Oil’s wipeout invites a new sort of activist

9 March 2020

Plunging crude prices have sent BP shares down 20%, with Shell and Total close behind. The rout could make it harder for oil majors to shift away from fossil fuels. Dirt-cheap valuations offer a way for activists to push CEOs to cut investment and return cash to shareholders.

Saudi sets global oil a stress test few will pass

9 March 2020

An all-out price war launched by the kingdom crashed the crude price over 20%. Values well below $40 a barrel are a setback for U.S. shale producers, global oil majors, national budgets, and the climate change fight. At least Saudi oil giant Aramco will share the short-term pain.

OPEC Russian roulette yields circular firing squad

6 March 2020

Moscow has rejected the cartel’s pleas for a supply cut to ease a virus-linked demand slump. Given the scale of the oil market imbalance, an inadequate deal was the best that could have been hoped for. But OPEC’s efforts to force the issue look like leaving everyone worse off.

OPEC readies knife for oil demand-slump gunfight

3 March 2020

The cartel and its Russian allies are set to curb crude supply again, to counter a virus-induced price fall. But even a 1 mln barrels per day cut may not do the job. To hike prices, OPEC needs Russia to prove helpful, Libya to stay troubled, and the coronavirus to not get worse.

Ecuador exit an irksome speck in OPEC’s eye

2 October 2019

Saudi Arabia may shrug off the latest departure from the oil-producing group over which it presides. Ecuador has other priorities that make it expedient to detach. But the net effect is bad for OPEC, because it’s a reminder that the value of membership is dwindling.

OPEC extends its awkward holding pattern

1 July 2019

The oil-producing group and allies like Russia can probably gee up prices a little by prolonging output cuts brought in last year. Gulf tensions should offset a demand-led hit to prices. But they will also make big contracts like Exxon’s $53 bln one in Iraq harder to close.

Saudi Arabia will feel Trump’s Iran slap too

22 April 2019

The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.

OPEC condition upgraded from terminal to ailing

7 December 2018

The oil producers’ club agreed a 1.2 million bpd cut with allies like Russia, hiking prices. After Qatar’s exit, failure to do so would have destroyed the cartel’s credibility. But the details imply OPEC leader Saudi’s wishes are subordinate to those of Russia and the U.S.

Qatar’s OPEC exit is a deft way to irritate Saudi

3 December 2018

Leaving the producer group is justified given big output calls are now taken by Riyadh and non-member Russia. Still, spurning a seat at the table is significant. It’s a way for Doha to flaunt gas riches, while implying a Saudi-led OPEC is increasingly chaotic and less relevant.

Saudi Arabia finds OPEC solution that helps itself

22 June 2018

At the oil producer group’s Vienna meeting Riyadh needed to hike output without sparking an Iranian walkout. It succeeded, and in a way that could gee Saudi oil revenue. The catch is that President Donald Trump may soon twig that the deal may not help to curb high oil prices.

OPEC supply easing is more reset than U-turn

25 May 2018

Saudi Arabia and Russia may lift oil output by 1 million barrels per day. Though that could knock prices, production of the black stuff will be more in line with the cartel’s previously agreed curbs. It’s a more far-sighted plan than allowing the value of crude to keep rising.

OPEC high point is an Indian summer

16 May 2018

The cartel’s biggest member, Saudi Arabia, wants oil to reach $100 per barrel. West Texas bottlenecks offer hope prices could get close. But cyclical forces are at work. Fresh pipeline capacity will unleash a tidal wave of supply. With prices high, demand will fall, too.