OPEC+ oil deal sends prices lower — and this could be a buying opportunity

CNBC2021-07-19

Oil prices fell nearly 1% on Monday morning during Asia hours after OPEC and its allies agreed to end oil production cuts. Brent crude futures fell 0.88% to $72.94 a barrel, whileU.S. crude ...

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Comments

Kmyong
2021-07-19
Kmyong
Yah, Time to go down price too high??
- JCBL:
  yes! but if prices goes down then projects will be delayed again and recovery will be further down the road. dilemma
Lim89
2021-07-19
Lim89
Gg
- Lim89:
  Haiz
SandDust
2021-07-19
SandDust
What producers really want is stability of prices rather than fluctuations of high price to low price and back to high price. It kills investment
- markmtay:
  Many are missing the spare production capacity OPEC+ has. In reality by 2H2022 they will run out of spare capacity. If demand does normalise back to pre-COVID levels, we will see prices spike then.

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It left the industry as well as investors in limbo asexperts warned that prices could either hit the roof or collapsewithout an agreement.\n\n This agreement should give market participants comfort that the group is not headed for a messy breakup and will not be opening up the production floodgates anytime soon.Helima CroftRBC CAPITAL MARKETS\n\n\"If they didn't have a deal, they would be left to their own devices and we could really see a free for all on increasing production from all of them, at a time when the return of demand still remains in question, due to the delta variant,\" Lipow told CNBC's \"Street Signs Asia\" on Monday.\nHe was referring to the highly transmissible Covid variant that's spread to more than 100 countries, pushing cases to record highs in several countries.\n\"This agreement should give market participants comfort that the group is not headed for a messy breakup and will not be opening up the production floodgates anytime soon,\" said Helima Croft, head of global commodity strategy at RBC Capital Markets.\n\n Really, this is a buying opportunity for well over the next six months, as those inventories around the world continue to decline.Andy LipowPRESIDENT, LIPOW OIL ASSOCIATES\n\nLast year, to cope with lower demand as the Covid crisis hurt economies and people could not travel much, OPEC and its allies agreed to curb output by almost 10 million barrels a day from May 2020 to April 2022.\n\"So the one thing that we do know is that OPEC+ did not want to see a return to prices last year in the $10 to $20 a barrel range,\" Lipow said.\nPrices fell to historical lowslast year, as the impact of the pandemic wiped out oil demand. TheWest Texas Intermediate crude fell below zero for the first time, before recovering to over $10 a barrel at one point. Brent oil fell to a nearly two-decade low of nearly $20 per barrel.\nTime to buy\nThis could be a buying opportunity for investors, says Lipow.\nThe \"silver lining\" is that the pace that OPEC+ is restoring oil production is still slower than the increase in global demand for oil, he said. That will support prices ahead.\n\"Really, this is a buying opportunity for well over the next six months, as those inventories around the world continue to decline. Here in the United States, we've reduced our crude oil inventories by 75 million barrels since April 1, and that's indicative of what's happening around the rest of the world.\"\nLipow said oil prices could go up to $78 a barrel for international benchmark Brent.\n\"I still think that the world has to wrestle with a return of demand and this delta variant that we're seeing spreading around the world. And that, of course, is keeping a dampener on prices,\" he said.\nCroft, too, cautioned that uncertainty could still lie ahead, as OPEC might reverse the 400,000 barrels a day increase.\n\"As the Saudi oil minister stated, the group can pause, reverse or continue with the 400 kb/d monthly increase based on key contingencies such as Iran ... and global COVID case counts,\" she wrote in a note on Sunday.\nThe U.S. and Iran are re-negotiating a 2015 nuclear deal, which could mean a return of Iranian oil to the market.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":173441644,"gmtCreate":1626682803688,"gmtModify":1703763263717,"author":{"id":"4087548754587790","authorId":"4087548754587790","authorIdStr":"4087548754587790","name":"Kmyong","avatar":"https://community-static.tradeup.com/news/285b1727eda76b0888c32eb184268abf","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4087548754587790"},"htmlText":"Yah, Time to go down price too high??","listText":"Yah, Time to go down price too high??","text":"Yah, Time to go down price too high??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/173441644","repostId":1112826934,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5264444,"gmtCreate":1626707596902,"gmtModify":1635225919124,"authorId":4087218051185710,"author":{"id":4087218051185710,"authorId":4087218051185710,"name":"JCBL","avatar":"https://static.tigerbbs.com/d52754657c86fcbf3892ea1fec33f39d","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":173441644,"type":1,"supId":0,"prevId":0,"content":"yes! but if prices goes down then projects will be delayed again and recovery will be further down the road. dilemma","text":"yes! but if prices goes down then projects will be delayed again and recovery will be further down the road. dilemma","html":"yes! but if prices goes down then projects will be delayed again and recovery will be further down the road. dilemma"}],"langContent":"EN"},{"id":173454452,"gmtCreate":1626682591576,"gmtModify":1703763257301,"author":{"id":"3527303552443900","authorId":"3527303552443900","authorIdStr":"3527303552443900","name":"Lim89","avatar":"https://static.tigerbbs.com/f21e4020ff962f4d66f99662b584ec1c","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3527303552443900"},"htmlText":"Gg","listText":"Gg","text":"Gg","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/173454452","repostId":1112826934,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5260716,"gmtCreate":1626682600269,"gmtModify":1663231158630,"authorId":3527303552443900,"author":{"id":3527303552443900,"authorId":3527303552443900,"name":"Lim89","avatar":"https://static.tigerbbs.com/f21e4020ff962f4d66f99662b584ec1c","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":173454452,"type":1,"supId":0,"prevId":0,"content":"<u>Haiz</u>","text":"<u>Haiz</u>","html":"<u>Haiz</u>"}],"langContent":"EN"},{"id":173467045,"gmtCreate":1626681166387,"gmtModify":1703763229746,"author":{"id":"3581331938298103","authorId":"3581331938298103","authorIdStr":"3581331938298103","name":"SandDust","avatar":"https://static.tigerbbs.com/ea6083d742fc232449a625fb122842c8","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3581331938298103"},"htmlText":"What producers really&nbsp;want is stability of prices rather than fluctuations of high price to low price and back to high price. It kills investment&nbsp;","listText":"What producers really&nbsp;want is stability of prices rather than fluctuations of high price to low price and back to high price. It kills investment&nbsp;","text":"What producers really want is stability of prices rather than fluctuations of high price to low price and back to high price. It kills investment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/173467045","repostId":1112826934,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5260980,"gmtCreate":1626684568966,"gmtModify":1663231158437,"authorId":3574921493150763,"author":{"id":3574921493150763,"authorId":3574921493150763,"name":"markmtay","avatar":"https://static.tigerbbs.com/2f2384a278d49b0e9edc5a5fc1f39ebe","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":173467045,"type":1,"supId":0,"prevId":0,"content":"Many are missing the spare production capacity OPEC+ has. In reality by 2H2022 they will run out of spare capacity. If demand does normalise back to pre-COVID levels, we will see prices spike then.","text":"Many are missing the spare production capacity OPEC+ has. In reality by 2H2022 they will run out of spare capacity. If demand does normalise back to pre-COVID levels, we will see prices spike then.","html":"Many are missing the spare production capacity OPEC+ has. In reality by 2H2022 they will run out of spare capacity. If demand does normalise back to pre-COVID levels, we will see prices spike then."}],"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":35,"commentSize":3,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.28.3","shortVersion":"4.28.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1112826934"}