Hedgeye CEO Keith McCollough and energy policy analyst Joe McMonigle break down the latest OPEC and oil market news on Hedgeye’s Thursday Macro Show. See why we are still bullish on oil – even with added OPEC production this year.
Click here to watch a the video clip of the McCollough/McMonigle discussion on OPEC and oil prices.
Oil prices went south last week after Russia floated the big shiny object of a 1 million barrels a day (b/d) production boost that would bust the OPEC production cut deal.
News reports and market consensus last week treated the comments as a done deal to significantly increase production to address $80 oil prices when OPEC and Russia meets on June 22. But it is far from a done deal, and in our view, any added production would be symbolic and stay within the OPEC production agreement cap.
Other news reports this week focused on dissention within OPEC about any move to add production. We are less concerned about any OPEC dissention and more focused on the Saudi/Russia dynamic.
Saudi Arabia is unfazed by $80 oil but don’t want any daylight between them and Russia on oil matters so they are playing ball with Russia to keep them in the fold on continued oil market coordination.
While the market seems to have priced in a 1 million b/d supply boost number, it is not what the Saudis have in mind. Instead, they want to bring along Russia to their view of no or modest increase in production.
NOTE: Join Hedgeye for a lunch briefing with former OPEC President and Algerian energy minister Chakib Khelil in Boston and New York on June 11 and 12 respectively. Contact for more information and to reserve your seat.
