Reward 500 Tiger-coinsAccording to media reports, US asked Saudi Arabia to increase production when energy costs soared and pledged to step in and buy oil if prices fell. But last week, the Biden administration went back on its word and publicly ruled out purchasing new crude oil.
The collapse of Silicon Valley Bank also affected commodities. Therefore, OPEC chose to cut production to stabilize the market.
Energy stocks surged yesterday, with $Marathon(MRO)$ up about 10%, $ConocoPhillips(COP)$ up 9.3% and $BP PLC(BP)$ up 4.74%. Buffett’s holdings - $Occidental(OXY)$ rose 4.4% yesterday; $Chevron(CVX)$ rose 4.16% yesterday.
Most analysts on Wall Street believe that most of this production cut will be implemented to actual production. They are bullish that Brent oil $Brent Last Day Financial - main 2306(BZmain)$ will reach $100/bbl.
Goldman Sachs raised the price of Brent crude oil to $95 a barrel by the end of 2023 and to $100 by the end of 2024.
How to trade crude oil?
1) WTI crude oil $WTI Crude Oil - main 2305(CLmain)$ is the most liquid and actively traded crude oil contract in the world.
2) Brent oil $Brent Last Day Financial - main 2306(BZmain)$ is the second largest futures contract in cmegroup's oil benchmark product family.
3) In addition to the two-largest crude oil contracts, investors can also choose $Micro WTI Crude Oil - main 2305(MCLmain)$ , micro contracts of crude oil.
Micro contracts require less margin and take less volatility risks than two standard contracts.
To learn more about crude oil futures, you can read How to Trade Oil and Make the Most of 24h Quotes?
Higher oil prices will drive CPI higher and lead to more rate hikes?
On April 3, a spokesman for the White House National Security Council held a press conference to oppose OPEC's production cuts. Treasury Secretary Yellen criticized the production cuts as "very unconstructive", adding to the burden of inflation and detrimental to the global economy.
Citi's Jefferies said:
From $ 80 per barrel, every $ 10 rise of crude oil prices will add 0.5 percentage points to US CPI.
This is a conclusion that takes into account the same percentage increase in gasoline prices and the weight of gasoline in the CPI (currently slightly more than 3%), as well as some spillover effects.
Bullard, president of the St. Louis Fed, said
Higher oil prices could make the Fed's job of suppressing inflation more challenging.
Some believe that OPEC production cuts may eventually make the Fed to continue to raise interest rates, with expectations of a 25 basis point hike in the Fed in May elevated.
Are you bullish on crude oil’s rebound?
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@SR050321 @CYKuan @HelenJanet @rL @Universe宇宙 @Jadenkho @melson @Mrzorro @GoodLife99 @SPOT_ON @Kaixiang @BenjiFuji @RDPD富爸穷爸 @b1uesky @MHh @PJoo @Pepermintpat @RiciaYang @jat @Omega88 @爱上投资学 @Zeniv @Elon2 @Yonhuat @Joker_Smile @grizzlylee @FrankieRed @spkek @snoopy123 @psk @pekss @amroui @StickyRice @StarLuck @Shyon @Success88 @kungpao @CL Wong @Derrick 1234 @MeowKitty @Thonyaunn @紫南 @Zarkness @Ah_Meng @Ratt @Tigress02 @Viv22 @aunteenat @Cory2 @airui @0QH @Cris0 @Brocco @AhGong @deal2deal @Ccl2 @Lcc73 @HLPA @WanEH @markele @pipiso @hlw8888 @Huiz84 @Kingcat @Jo_Tan @RedpillBluep @Furore @breAkdaWn @boardy @Cory2 @Soyabean89 @ngph @KYHBKO @Lionel8383 @Downton
@SR050321 @CYKuan @HelenJanet @rL @Universe宇宙 @Jadenkho @melson @Mrzorro @GoodLife99 @SPOT_ON @Kaixiang @BenjiFuji @RDPD富爸穷爸 @b1uesky @MHh @PJoo @Pepermintpat @RiciaYang @jat @Omega88 @爱上投资学 @Zeniv @Elon2 @Yonhuat @Joker_Smile @grizzlylee @FrankieRed @spkek @snoopy123 @psk @pekss @amroui @StickyRice @StarLuck @Shyon @Success88 @kungpao @CL Wong @Derrick 1234 @MeowKitty @Thonyaunn @紫南 @Zarkness @Ah_Meng @Ratt @Tigress02 @Viv22 @aunteenat @Cory2 @airui @0QH @Cris0 @Brocco @AhGong @deal2deal @Ccl2 @Lcc73 @HLPA @WanEH @markele @pipiso @hlw8888 @Huiz84 @Kingcat @Jo_Tan @RedpillBluep @Furore @breAkdaWn @boardy @Cory2 @Soyabean89 @ngph @KYHBKO @Lionel8383 @Downton
inflation will continue to fall. that's the narrative that the whole world is expecting. self fulfilling prophecy. plus fairy god Fed will ensure that.
keep buying the dips and be rewarded 5 years from now