#ForexChief #opec #stocks #Market #forexnews #brent #wti #worldnews ⠀
📌 OPEC is trying to regain control of the market
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🛢️ OPEC chief Haytham Al-Ghais hosted a business dinner with US shale bosses, a tradition started by his predecessor Barkindo six years ago when rising shale oil production threatened the balance of global commodity prices. The challenges and new supply logistics were now being discussed with representatives from Occidental, Pioneer, Diamondback, Devon Hess Occidental, Pioneer and Diamondback. The dinner was also attended by two officials from the US Department of Energy.
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Conflict in Ukraine raised the price of Brent to $130, but the
OPEC countries increased production, Russia maintained the volume of supplies, the US released oil from strategic reserves, and the market managed to stabilize. Now, the recovery of the Chinese economy after the cancellation of the Zero Covid policy is putting pressure on suppliers, and a new price hike is inevitable.
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The current discussion was active and aggressive – the parties identified pain points, but the treatment program has not yet been approved.
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From what was discussed behind closed doors, the press was told a little:• Demand is growing, and stocks are shrinking.
• Shale revolution fading: companies warn of higher production costs; pressure from investors demanding the payment of dividends will slow down the growth of supply in the US.
• Saudi Arabia, the United Arab Emirates, and Kuwait remain the industry leaders, and the situation will not change in the next 25 years.
• If the US maintains production at the current level, then in the next 10 years the
OPEC+ group will dictate its terms to the market.
• The US has not yet received a clear answer to the question of how much spare production capacity
OPEC can use.
• If investment in exploration and production is not increased, problems with energy security are guaranteed in the next 5 years.
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There is only one conclusion: it is business that controls the oil market, not politicians, and there were no clear signs of agreement among the meeting participants. Time will tell how this will affect the global result.
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Profits to y’all!