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Question for the Experts – OPEC Oil Feuds

So a number of organizations are reporting that the current negotiation deadlock among OPEC nations could possibly result in OPEC falling apart. Their primary duty has been to essentially establish and regulate an oligarchy – keeping oil prices high so all the oil companies profit handsomely.

[Source](https://oilprice.com/Latest-Energy-News/World-News/Energy-Stocks-Fall-Following-OPEC-Failure.html)

Here’s my question. If oil prices fall, demand would ostensibly increase. Wouldn’t that benefit midstream (storage/transportation) agencies? Higher volume and no reduction of their fee structure.

I’m looking at $OKE, $ET, etc.

They all fell today. But if oil demand surges, it seems they stand to benefit, while all other associated industries would suffer (petroleum from decreased revenue and lower margins, alt energy from reduced demand, etc.).

Can we expect to see a strong rebound from the midstream group resulting from the overreaction of the market today?

What do you think?

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5 Comments

  1. OPEC is in a catch 22 situation that’s why those retarded old apes aren’t able to come to an agreement

    1.) UAE production capacity has increased but they are not allowed to pump at full capacity because their production volume is capped as per OPEC

    2.) OPEC is in a predicament trying to find the G-spot equilibrium pricing based on function of supply/demand:

    a.) Keep Oil prices at a level where they still get to enjoy juicy margins

    b.) At the same time, keep oil prices low enough as to not shoot themselves in the foot by pushing the whole world to accelerate adoption of renewables because oil has become too expensive

    ****inb4**** but renewables are expensive too blah blah blah, 5 years ago, I would agree with you, but not today as we have seen cost of renewables drop at an exponential pace.

    ****inb4**** but the drop is price is because of government subsidies blahblahlbahlablah. Yes, agreed but fossil fuel has also received subsidies for decades, while at the same time those oil producers has milked us consumers with high prices, and we have zero fucking choice because we need oil as it is an inelastic demand.

    Simply put, renewable adoption is unstoppable for the next decade ***mark my fkin words.***

    3.) With that said, some members of OPEC knows the renewables will not be stopped so they want to pump out as much now as possible to take advantage of these prices, because in the next 5-10 years, alternative sources of energy will gain more traction + along with carbon tax implementation forcing demand for oil to slowly diminish.

    ****inb4**** but fuck OPEC, how about US Frackers? can’t they just fill the gap? don’t tell me those greedy bald old apes in large cap oil companies are just circle jerking each other in their backroom office? Well yes, even if oil goes up to $100, those fucks won’t be drilling.

    Why spend $ on projects with at least 3-5 years of payback periods and by that time the whole world has moved on to renewables energy?

    Also, Grandpa Joe and the rest of the world is serious about reducing carbon even China and India. So I bet Grandpa Joe’s pulling strings behind the scenes to prevent these old fucks from drilling. So even if they want to, they can’t.

    if you wanna fuckaround with oil sector, buy the dips and better have an exit plan, holding long term would fuck your butthole.

    not financial advice, im a certified retarded ape

  2. idk man oil is relatively inelastic so i doubt consumption has waned as prices have soared. if price drops, quantity demanded would surely increase but i’m not versed well enough in oil markets to say whether it would be a lot, or not much.

  3. OPEC doesn’t have enough barrels to flood the market. US production has dropped 2 million barrrels per day in 1 year. Russia could increase, but so many countries are in terminal decline and demand is so strong that I don’t believe the oil price will drop too much.

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