Did OPEC Fumble This One?

The discussion revolves around the confusion regarding OPEC’s recent announcements. Despite hinting at potential future quota increases, OPEC decided to maintain current production cuts until 2025. Oddly, oil prices dropped following this announcement. This creates potential investment opportunities in energy stocks as oil prices fluctuate within a range. The conversation also touches on the desire of OPEC to keep prices higher than current levels, around $88 per barrel, instead of the $75 per barrel seen recently.

Transcript:

I can’t figure out what OPEC is doing at all.

And maybe that’s just like everybody else because they don’t come right out and tell you exactly what they did because each of the members may have a different point of view.

So it looks like OPEC is going to sort of stay with the cards it’s got on the table, maybe tighten a little.

Oddly, the oil prices have gone down in the face of that announcement.

Now, there are a lot of other metrics, but what’s going on with their announcements?

Well, I think there was some confusion in the message this past weekend where they were saying like, OK, we may let the quotas drift higher in the fall, but we’re keeping our cuts in place, our current production cuts into 2025 and maybe to the end of next year.

And you’re right. Oil sold off pretty hard. And that’s kind of an odd thing.

Shift when, yeah, they could raise output 300,000 barrels a day. I mean, that’s nothing in the big picture. And I think there was some confusion there.

And I think there’s a really great opportunity for people that want to own energy and oil to start looking at shares of the right companies now, because oil has been in this bandwidth range of $70 in West Texas intermediate of 70 to 90.

And it’s back down around that 70, 72 level. And there may be some opportunity there.

If I were in their shoes, I might say to myself, based on oil prices right now and also U.S. output as much as anything else, I might wish that I had decided to say we’re going to tighten, we’re coming down, because obviously they don’t want it at 75, they wanted it at 88.

Absolutely. Yeah, I’m surprised.