RE:RE:WTI down 4.25/bblliljohnnyjoke wrote: Biden is trying to convince OPEC to increase production and drive oil prices down so US citizens can fill up big 4WD SUVs cheaply. Not sure why OPEC would want to increase production Now if storage is on the rise? Maybe in winter after some big draw downs in storage?
Yep None of the big players right now seem to have much interest in increasing oil production and that includes the major oil companies. The small and medium sized companies that were traditionally the swing producers and increased production when oil prices were high are essentially out of the game because they can't get bank loans to finance increased production. Some of the oil business is being siphoned by renewables but as most sane people realize a world of renewables is long time into the future. All this sounds rosy - right? Yeah - in a way it is but the big cloud over the whole thing is the potential for a world wide recession driven by inflation caused by excessive government spending and yes high oil prices themselves. Higher inflation will bring with it higher interest rates onto a generation that is highly leveraged especially in terms of house mortgages. In major housing markets in Canada and the US it is not uncommon to see people with mid 6 and even 7 figure mortgages that are currently financeable with mortgage rates in the 2s or even high ones. A few points in the interest rates could bring a bank crisis not unlike what we saw in 2007/2008. If such a recession does take hold and IMO that fact is inevitable we will see oil prices tank for a while and those that bought into the narrative that high oil prices are here to stay will be left holding the bag.