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Are supply and demand bases that have dominated the oil market for decades being eroded?
Regular demand and price increases result in increased supply. But as the past week has shown, these are not the times.
Recent: Two days after the Binden administration took immediate action to shift to a low-carbon economy, US National Security Adviser Jack Sullivan appealed to OPEC + to raise oil prices.
The contrast highlights the inconvenient fact – the world still needs oil. But pressure is mounting on major oil companies to release fossil fuels, and U.S. producers are in debt.
Despite a 60% increase in Brent crude prices last year, Saudi Arabia, Russia and OPEC + are taking a cautious approach and are slowly resolving the decline.
That means supply may be tight in the coming months.
A big picture: Per Magnus Nysveen, Restad Energy’s analyst, told me that investors are waiting for a cover on the growth of oil companies that are responding to the growing climate crisis.
Check it out here – last year, according to Morgan Stanley analysts, It dropped from $ 740 billion in 2014 to $ 348 billion in oil and gas development worldwide. They estimate that the shortage of investment in state-owned companies will begin to decline by 2024.
U.S. investors have also kept the pressure on shareholders to keep their cash flow relatively flat over the past decade.
Frances Picard / AFP / Getty Images
Knives from wind turbines rotate in the field behind an out-of-service fuel pump, April 16, 2021, near Eldorado, Texas.
At the same time, demand is rising. Despite the recent rise in oil prices on the VV-19 issue from Delta alternatives, the International Energy Agency has not significantly changed its forecast for global oil demand.
In a report last week, it said it had eased OPEC +’s decline in production, but said the market could still be short of supply by the end of the year. He added that more supply could come online next year.
Remember: Delta alternatives pose a threat to oil demand in the near future, but the global economy is still projected to grow by 6% this year.
As the world’s population grows and per capita GDP increases, Morgan Stanley commodity strategists Martin Rat and Amy Sergeant wrote in a study last month that long-term demand may be “sticky.”
“This is a combination, which will increase from 2024 to supply / demand,” he added.
What it means – a better deal for OPEC and subsequent higher prices. The union already controls more than a third of the world’s oil, and has grown by about 50%, including non-OPEC producers such as Russia and Mexico. “In 10 years, OPEC’s share will grow,” says Nisven.
With declining investment, OPEC said it did not need to support oil prices in the short term to protect its market share in the long run.
Brent expects $ 70 to reach the top $ 70 in the mid-70s and $ 20 a barrel by 2022.
One big unknown – it has recently taken several negotiations with OPEC + to agree on a product increase, and there are questions as to whether EU members will stick to the outcome limits.
“OPEC + members have been deceived by high prices, which means they are often more corrupt and more likely to earn higher incomes,” said Tom Clolo, head of global energy analysis at IHS Martit’s Oil Price Information Service.
Bottom line: Billions of dollars are investing in low-carbon energy sources, but the world still needs oil. The global oil industry is struggling to find new business models to explore energy transfer…
AMC seems to have attracted the attention of its biggest competitor following its rapid stock price profits and a reliable retail investor.
What’s happening: Cineworld, the world’s second-largest cinema chain, announced last week that it was considering the US list. He also said that he could choose the “partial list” of Regal, which he bought in 2018 to steal large sums of cash around the US stock market.
“US equity capital markets are the largest and most liquid in the world and include a large number of publicly listed cinema companies, including peer groups,” the statement said. These companies are typically covered by a large number of local investors in the North American equity industry.
Meme stock mania? It’s hard to believe that Cinewell did not recognize AMC’s share price. The AMC stock has reached more than 1,500% this year, thanks in part to the Reddit Coordinating Retail Investors’ Army.
In comparison, Sinwold made a profit of 2%. The company’s chief executive, Muki Grederger, told the Financial Times that the move had nothing to do with AMC’s recent stock performance. “This is just one of the many options available to us in the capital markets,” he added.
But the reality is that private investors are still a powerful force on Wall Street and companies are embracing it. And why not?
MC managed to raise $ 587 million in June, although analysts covering the company are below the pre-epidemic levels of stock and theater acquisitions.
Check it out – Cinewell says it will review its options “in the coming months.” If the list goes ahead, Gregerger can look at AMC CEO Adam Aaron’s performance last week at the company’s revenue call for advice on how to beat the Red Devils.
Monday: Japan Q2 Domestic Product
Tuesday: EU Q3 GDP flash estimate; U.S. retail sales; BHP (BBL), Home Depot (HD), Monday.com, Roblox and Walmart Revenues
Wednesday: Minutes of eating; TSLA “AI Day”; Tencent (TCEHY), Weibo (WB), Lowe’s (LOW), Target (CBDY), Cisco (CSCO), Nvidia (NVDA) and Robinhood Revenue
Thursday: U.S. Unemployment Claims; Revenue from Kohl’s, Macy’s (M), Applied Materials (AMAT) and ROST stores (ROST)
Friday: Dere (D) and Foot Lock Revenues