Global Analysis from the European Perspective. Preparing for the world of tomorrow




OPEC + XXL – a new cartel

We are witnessing the greatest transformation in the oil market in history.

What was recently political fiction has become reality: Saudi Arabia, the US and Russia are on the same side. After long negotiations, the largest producers of the black gold agreed to drastically reduce extraction. The limitation of the produced quantities by 20 million barrels per day (according to Trump) means a 20% lower supply (every day a total of 100 million barrels are offered in the world). Although many investors still see no reason for a rapid increase in WTI and Brent (two main types of oil), as world demand has fallen by 25 million barrels due to the so-called pandemic, the determination of the global players should be a warning to the bears on the market. The most likely scenario for most members of the new giant cartel (which also includes Canada, Mexico, Brazil, Kazakhstan and Azerbaijan) is price stabilization between 60 and 70 dollars per barrel. If prices are higher, they are more likely to counteract this, as it would encourage an acceleration of the introduction of massive e-mobility, which would not play into their hands. You can find more about commodities, which will soon be an attractive investment, in our next Bulletin No. 43.

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