Thread on oil prices, etc

1- China supports oil demand & oil prices in NORMAL circumstances. It cannot do so in a #COVID19 world. Lower oil prices might encourage imports and inventory build, but all of that will backfire when oil prices rise.
#China #oil #OOTT #OPEC

2- Production cuts by #SaudiArabia and its allies, along with improvement in global oil demand, has already doubled oil prices. Continuing the cuts will prevent a price decline/collapse.

So between production cuts and China, prices are going nowhere: range bound. #oil #OPEC

3- The "oil demand trap" may get larger as COVID19 cases soar. Inventories would decline at a slower pace than earlier expectations. Here where the OPEC+ plays a role: to prevent a decline in oil prices, will OPEC+ choose not to increase production on Jan 1, 2021? #OPEC #OOTT

4- #OPEC+ response to another major wave of #COVID19 early next year will only keep current price range! It is easier to "not increase" production than to go for another round of cuts. But remember, #Libya is back! If Biden wins, we will see more Iranian #oil any way by Dec-Jan!

5- By the way, seeing more Iranian oil DOES NOT mean an actual increase in Iranian oil production. But many media outlets and consulting houses would say it is an increase... and that will put downward pressure on oil prices anyway. #Oil #OOTT #Iran

6- The good news is that we might see better compliance from several OPEC+ members in the next two months because of scheduled maintenance. The bad news: once they finish their maintenance, who will stop them from producing in early 2021? A revision?

#Oil #OOTT #Iran

7- Lower E&P investment, shale high decline rates, declining inventories, oil on water & floating storage are supportive when demand is increasing! They would not raise oil prices at this stage. We may not see their impact until second half of 2021 & later.
#Shale #oil #OOTT

8- If oil companies are convinced that oil prices are range bound in the next 8 months+ with some downward pressure, there is no reason for a new wave of mergers and acquisitions.
We might see additional capital flight from the industry!
#OOTT #shale