Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things we are currently keeping an eye on in the global macro landscape.
Why – even after successive cuts – does crude oil keep settling on a $70 barrel? The conundrum has pitted the OPEC+ alliance against each other. Suspicious eyes are turning away from outside foes, and are now looking inwards, trying to sniff out the mole who is free-riding on the collective. Will the imposter be detrimental to Saudi’s production cut strategy?
Something for your Espresso: Saudi Arabia wants a fight with Biden, but they don’t have the upper hand
Saudi Arabia once again attempts to gain the upper hand in the oil-market, but struggle to get the momentum going. Meanwhile, this week’s data may look like Goldilocks is back in the making,.
Watch out for the OPEC meeting this week as desperation can become the killer of solidarity, Easing energy pressures lending a helping hand to the EM space, Industrial metals screaming for more Chinese credit impulses
Will OPEC+ be able to rock the boat in energy markets again? Saudi Arabian budget break-evens are probably 5-7$ above current selling prices and MBS could be tempted to try and force the price higher again. The issue is that China is not playing ball and other OPEC+ members oppose further production cuts.
Is the massive OPEC+ cut bullish for oil? Or will the price action resemble former supply cuts? Empirical data suggests that it is not bullish oil, but a recession is needed to bring oil lower now.