Despite Biden's vision of a green planet, the rest of the world isn’t slowing oil production. Because it’s currently less friendly to invest in U.S. oil and gas, the world’s biggest polluters will likely begin to pick up oil production while the U.S. is left out.
OPEC+ projects that the oil market will be in deficit throughout 2021, peaking at 2.0 million barrels per day (bpd) in May.
They’re attacking short sellers and they’re now realizing that silver is undervalued when compared to gold and Bitcoin. It’ll only be a matter of time until they realize that oil is cheap, as well.
The administration's disdain for fossil fuels and focus on climate change will likely restrict U.S. supply and cause prices to rise.
Chinese refiners are busy trying to refine heating fuels as winter in Asia proves to be brutal this year. The demand for fuel is driving up prices and there are reports of some shortages.
Saudi Arabia is already sensing an opening, cutting production to raise prices without any fear of an angry tweet and feeling free to manipulate prices higher.
Being an oil bull is not as lonely as it was a few months ago as the bullish fundamentals are becoming clear even to the most die-hard bears. Despite skepticism that OPEC+ could keep it together and reduce global supply, there’s now no doubt they can.
While the markets reacted to the storming of the Capitol with a quick drop and a spike in the VIX Index, the resilience of the market suggested that, despite the unrest, there is unwavering confidence in the United States.
While the surprisingly bearish American Petroleum Institute report, along with Georgia and the U.S., are still hanging in the balance, they’re keeping prices on oil flip-flopping near the $50 per barrel area.
We’re getting strong overall commodity sentiment as funds look to get long and rebalance. It appears that OPEC+ is recognizing the reality of more Covid-19 lockdowns and that perhaps it isn’t the time to be raising production just yet.