- March 20, 2019
- Posted by: Art Berman
- Categories: Presentations, Presentations & Publications
Art, thanks for sharing your analysis.
The flatter yield curve suggests to me that the market has more confidence that Saudi Arabia is willing and able to manage the price and keep it relatively stable. In fact this is what they are saying publicly. It also appears that the frackers will have more restricted capital going forward which will limit their ability to flood the market with un-economic oil. In other words, the market is anticipating SA’s return as swing producer, imo.
CI, rear view mirror analysis which provides zero help to predicting price going forward. FYI, the Oct-Dec collapse was a result of overproduction by Saudi, UAE, Kuwait from April 2018 till Dec 2018. Shale is a footnote.
Art, yes I agree a flat yield curve suggests confidence in supply security… going up the curve… in other words confidence that OPEC can and will increase supply to meet increasing demand. But the flat yield curve also suggests to me that that the market has confidence in supply cuts to offset reduced demand in an effort to keep prices stable… coming down the curve. I believe the market has this confidence due to OPEC’s recent talk of supply cuts to balance the market and restricted capital to the frackers which will limit their ability to flood the market with supply. I think the result is Saudi Arabia will return to its role as swing producer and we can look forward to more stable prices, which is a good thing imo.
Thanks Art,your commentary are the best all around the web.
You’re sintesyhis gives an extremely clear pictur of the oli sector withaout emphasis or personal bias