Last month was crude oil’s worst in a decade, battered by supply concerns and global politics.
West Texas Intermediate, or U.S. crude, lost 21 percent in November, tumbling to its lowest level in a year and logging its worst performance since October 2008.
After sinking below $50, the days ahead could bring some relief, according to Helima Croft, global head of commodity strategy at RBC Capital Markets. This week, the cartel of oil-producing nations known as OPEC will make a decision on future levels of production that may determine where prices head in the near term.
A Failure Of OPEC+ Could Turn The U.S. Oil Boom Into Another Bust?
The prevailing conventional “wisdom” appears to be that they will take their medicine one more time, and agree to at least extend their agreement through the end of 2019, and possibly make further cuts to their export levels. One thing is certain: The U.S. industry, which has benefited greatly from the OPEC+ agreement, is holding its collective breath hoping that does happen. Because if it doesn’t, this great oil boom of the past few years could turn into another bust almost overnight. @ forbes.com
Just in case you aren’t thinking about it yet.
OPEC is sending a clear warning to Washington
OPEC is sending a clear message to Wall Street banks and big investors: if Washington passes legislation that would allow the U.S. government to sue the cartel, the first victim will be shale.
Suhail Mohammed Al Mazrouei, the United Arab Emirates oil minister and the former president of OPEC, told a group of U.S. financiers Monday that if the so-called NOPEC bill becomes law, the cartel would stop working and therefore every member would raise production to maximum capacity, causing a crash in oil prices and thus the end of fracking in the U.S, according to people who attended the meeting.
Soon, the Senate Judiciary Committee, led by Sen. Lindsey Graham, could have a chance to determine NOPEC’s fate.
The American Petroleum Institute has stated its opposition to the measure, but OPEC is taking aim at the financial industry that plays a big role providing billions of dollars in debt and equity to U.S. drillers.