When it comes to the supply side, the WSJ makes the case that OPEC+ members may be more inclined to support prices with steeper cuts than in the past as market share concerns have diminished. However, they continue to be net long, which I do not expect to change, given stronger-than-average oil fundamentals - at least on the supply side. ![]() Russia's robust oil exports despite Western sanctions.īullish analysts have repeatedly revised their forecasts downward, and bullish traders have faced losses.Īlso, looking at positioning, we see that money managers have reduced their net positions to the lowest levels in more than five years.concerns about an economic slowdown, and.increased petroleum production from non-OPEC+ countries,.Several factors have contributed to the decline in prices, including: This is a very important thing to keep in mind, as this will almost certainly lead to more efforts to support the price of oil. This is below the estimated $81 per barrel that Saudi Arabia, the de facto leader of OPEC, needs to balance its budget. Prices have been on a downward trend since October when the Organization of the Petroleum Exporting Countries ("OPEC") and its allies, known as OPEC+, announced production cuts of 2 million barrels per day, as displayed in the chart below.Īdditional cuts by Russia and voluntary reductions by eight OPEC+ members have failed to halt the slide.īrent crude oil futures, the international benchmark (even more important than WTI), have dropped about 20% since the October cuts. NYMEX WTI is currently trading in the low $70s range, which is down from the low $80s range in prior months.Īs reported by the Wall Street Journal, oil traders are continuing to bet on falling oil prices despite efforts by producing countries to boost them. However, prices have come down in recent months. Now, let's dive into the details! What Happened To Oil? The moment economic growth bottoms, I expect oil to reach triple-digit dollar territory, causing EOG to boost its dividend, outperform its peers, and start a meaningful long-term uptrend. I believe we'll see a lot more of this, which is set to hurt supply growth even more. Now, the company is becoming more cautious and deferring certain projects. It has a deep, high-quality inventory, efficient operations, and a management team eager to let shareholders benefit from its success through regular and special dividends. ![]() The company produces both oil and natural gas. Houston-based EOG Resources ( NYSE: EOG) has it all. In this article, we'll discuss one of the best drillers on the market. While oil stocks aren't a fun place to be, I'm a buyer again, boosting my stake in preparation for the next inflation wave. Economic growth fears are hurting cyclical commodities while pushing money into technology and growth stocks. ![]() Arseniy45/iStock via Getty Images Introduction
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