April 29th, 2016
After the failure of global oil producers to set a production cap during a high-profile meeting in Doha earlier this month, doomsayers predicted that prices would crater.
How wrong they were.
At close of trade yesterday, crude oil prices had risen to their highest level since early November of 2015.
U.S. oil was up 5.3% for the week, 20.1% for the month, and 75.6% since its low for the year on February 11.
Meanwhile, Brent – the international benchmark for oil, set in London – closed up 6.6% for the week, 21.6% for the month, and 58.4% higher than its 2016 low on February 9.
The same doomsayers are now saying that these prices are unsustainable, and will fall back in short order.
In fact, today I’m revising my oil price forecast upwards, for three reasons.
The second one is both a blessing and a curse…
April 26th, 2016
Some time ago, while I was advising on a refinery project in Ecuador, I explained here in Oil & Energy Investor how China’s oil policy was evolving.
The country’s objective used to be controlling oil production abroad, with the aim of transporting that oil back home.
But in 2013, Ecuador, the smallest of the OPEC producers, learned the hard way that this objective had changed. After running out of money, both Ecuador and its national oil company had to rely on loans from China to stay afloat.
In return, Beijing gained control over the revenue flow from Ecuadorian oil exports. The oil was allowed to flow anywhere, as long as the proceeds went back to China (as loan repayments).
Now, several of my sources are telling me that China is about to unleash the next step in its plan to control the world’s oil markets.
And this time, the targets can be found in an unsuspecting place. And in an unsuspecting fashion, too…