Oil prices usually are influenced by a number of factors. But there arguably have been times when OPEC spare capacity has been the most important factor for driving oil prices. Here we identify the circumstances when this has likely been the case in the past.
The Chinese market is a top prize in the oil industry, and for months a buzz has spread that Russia is poised to overtake Saudi Arabia as China’s top supplier. This could both increase Russia’s economic power and decrease Saudi Arabia’s leverage in the global oil market. However, there are significant reasons to be skeptical that such a scenario is underway.
Wouldn’t we all like to know that today is the bottom of a sharp sell-off, so we can buy at just the right time? Some would say that’s trying to catch a falling knife, and certainly there is significant risk in a volatile market that’s been collapsing. But then risk is relative to reward, and if the reward is big enough, the risk can be worth it.