The Wall Street Journal reports OPEC+ Eyes Output Increase Ahead of Restrictions on Russian Oil
Saudi Arabia and other OPEC oil producers are discussing an output increase, the group’s delegates said, a move that could help heal a rift with the Biden administration and keep energy flowing amid new attempts to blunt Russia’s oil industry over the Ukraine war.
After The Wall Street Journal and other news organizations reported on the discussions Monday, Saudi energy minister Prince Abdulaziz bin Salman denied the reports and said a production cut was possible instead.
The White House said the production cut undermined global efforts to blunt Russia’s war in Ukraine. It was also viewed as a political slap in the face to President Biden, coming before the congressional midterm elections at a time of high inflation. Saudi-U.S. relations have hit a low point over oil-production disagreements this year, though U.S. officials had said they were looking to the Dec. 4 OPEC+ meeting with some hope.
The Denial
Just minutes after the WSJ article now revised to include the denial, Reuters reported Saudi denies oil output hike discussion, says OPEC+ may cut if needed
Saudi Arabia on Monday said that OPEC+ was sticking with oil output cuts and could take further measures to balance the market amid falling prices, denying a report it was considering boosting output, according to state news agency SPA.
The Wall Street Journal earlier on Monday reported an output increase of 500,000 barrels per day was under discussion for the next meeting of OPEC and its allies, known as OPEC+, on Dec. 4. The report cited unidentified OPEC delegates.
“It is well-known that OPEC+ does not discuss any decisions ahead of the meeting,” Saudi Arabian Energy Minister Prince Abdulaziz bin Salman was quoted by state news agency SPA as saying, referring to the group’s next meeting in December.
The WSJ said talk of a production increase has emerged after U.S. President Joe Biden’s administration told a federal court judge that Saudi Crown Prince Mohammed bin Salman should have sovereign immunity from a U.S. federal lawsuit related to the killing of Saudi journalist Jamal Khashoggi.
It’s difficult to say if the team Biden sponsored this rumor or if it was some sort of trial balloon by OPEC.
Either way, the reaction was not welcome by OPEC.
Meanwhile the Biden administration Presses Allies to Tighten Up Sanctions Enforcement on Russia
“There are public reports that Russian money laundering is active in the Arab world,” Ms. Rosenberg told a Union of Arab Banks conference late last month, using unusually pointed language that U.S. officials say was intended as a warning. “This is something we all have a vested interest in preventing, investigating and eliminating.”
Western officials and some senior compliance officers are concerned that banks in Austria, the Czech Republic, and Switzerland—a non-European Union member that has adopted the EU sanctions—are taking a relaxed view of sanctions enforcement.
If you want much higher oil prices then you should be cheering team Biden here. If not, well, you figure it out.
Comments of the Day
Quite possible but do not discount Biden’s propensity to do stupid things, really stupid things.
— Mike “Mish” Shedlock (@MishGEA) November 21, 2022
President Biden, the UN, and the Climate Lobby Seek to Spread More Fossil Fuel Misery
In case you missed it, please see President Biden, the UN, and the Climate Lobby Seek to Spread More Fossil Fuel Misery
China says it needs more coal power for energy security and, unlike Europe and the U.S., it won’t commit climate suicide.
This post originated at MishTalk.Com.
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Mish
that Saudi Crown Prince Mohammed bin Salman should have sovereign
immunity from a U.S. federal lawsuit related to the killing of Saudi
journalist Jamal Khashoggi.”
Richard G. Anderson, world’s leading guru on reserve balances: “Spencer, this is an
interesting idea. Since no one in the Fed tracks reserves…”
Bernanke contracted legal
reserves for 29 contiguous months which directly caused the GFC.
President, Federal Reserve Bank of St. Louis and past member of the FOMC (the
policy arm of the Fed) as cited in the WSJ April 10, 1986:
money growth ever became the primary priority of the Fed. I think that there
was always and still is, a preoccupation with stabilization of interest
rates”.
effect of oil price shocks [in the 1970s] on the economy results not from the
change in oil prices, per se, but from the resulting tightening of monetary
policy”.
data as having much predictive value.”
The world is not ignoring the problem. In fact, the world is currently attempting a transition away from fossil fuels and towards renewable energy.But it isn’t going well. It is much more difficult than most people expected. We are not building enough renewables to even meet our additional energy demands each year. Which is why our demand for fossil fuels continues to grow every year (or 18 out of the last 20 years anyway). Yet the oil companies got the signals loud and clear to reduce capex spending and slow the supply growth of oil. The result is that we are now in a situation where supply is not going to meet demand as this decade progresses.Which is why I have been heavily invested in oil and gas companies for the last few years. There will be upward pressure on oil and gas prices for the rest of this decade. I can’t change what is happening. But I can recognize what is happening and I can profit from it.
You’ve got to love the volatility. I bought 9 different oil and gas names this morning in my trading account. Sold 4 of them already for big gains.