UAE is considering leaving OPECThere's always a tad of truth to rumors and if UAE did decide to split it would certainly have a negative effect on Oil prices now that the idea has been exposed it does signal changes in the war on Oil and with rumblings that OPEC members wanting to increase production will only hurt tightness. This also brings light to my post even before this happened and it was about Biden NOPEC Bill to remove the control OPEC has over Oil Production which controls the price so this is a coincidence that there's still talk of dismantling OPEC from both sides. We have Russia dumping Oil into China and Asia, then Iran is also dumping Oil into the market, then US Shale is supposably increasing production along with SPR dumping 26Mil barrels into the market in April and it has to do with China's forecast for increasing demand and everyone wants a piece of it and they're even breaking rules in doing it. When Russia threatened to cut Oil production Oil really did nothing even selling off but with the mention of the possibility UAE could flood the market with Oil the US rallied, I know there's more to it but you have to wonder sometimes what really driving Oil, then there's talk of eliminating the USD in favor of the Yuan for Oil purchases with Russia doing the same with NG sales Russia only excepted Rubles, and the list goes on how many countries wanting to make changes in Oil production and sales. And let's not forget the latest about stopping Oil sales directly from the US to China. The only real issue right now is still having excessive amounts of Oil marginally more than demand and unless something changes we could bounce aimlessly for the next 2 months unless Biden dumps more Oil in May. Right now there are more countries wanting to increase production than reduce and this will continuously weigh on Oil as no one is happy being limited OPEC has lost others in its group before so UAE has to be taken at face value and they might come back in weeks admitting to changes to Oil production and again be blind sighted. Russia trying to dump as much Oil as possible at steep discounts has other countries worrying that they might not be invited. The market did exactly what I wanted for Oil to be up $1.50 over $79 and I've posted that this exact situation needed to happen to see if the bulls have our backs. As much as it is possible for Oil tightness to happen because of China we are learning that Oil saturation happening is just as possible with producers wanting to be limitless. We survived this week ending green so I'll take this as a win.
Oil prices volatile on report UAE is considering leaving OPEC (cnbc.com)