OPEC Meeting Preview: Why $50 Oil Is Cause For Concern

Takeaway: While $50 oil will please most OPEC members, Saudi Arabia's market share policy is based on lower prices for all of 2016.

OPEC Meeting Preview: Why $50 Oil Is Cause For Concern - OPEC cartoon 04.24.2015

 

Hedgeye Potomac Senior Energy analyst Joe McMonigle is in Vienna to attend the June 2 OPEC meeting and participate in various pre-meeting activities this week. Hedgeye will host a OPEC meeting preview conference call on Wednesday, June 1 at 1pm EST with Joe from Vienna and former US Energy Secretary Spencer Abraham from Washington. (For access to the call, email sales@hedgeye.com.)

 

First, we are not expecting any change in OPEC policy (i.e. production freeze or cut) at this meeting but Joe will be watching closely for signals of how OPEC may approach the December meeting after significant declines in US and other non-OPEC supply.

 

While he is not predicting a change in policy, Joe believes the December meeting will be the first time in two years when it will be under serious consideration. Meanwhile, production outages in Canada and Nigeria have pushed oil prices to $50.

 

While that will please most OPEC members, $50 oil is too premature from the viewpoint of Saudi Arabia. The Kingdom's market share policy is based on lower prices for all of 2016; therefore, sustained prices around $50 now will cause concern in Riyadh and could trigger some response.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more