Oil oversupply a ‘double-edged sword’ for OPEC (CNBC)

Oil oversupply a ‘double-edged sword’ for OPEC, analyst says from CNBC.

If OPEC remains fixated in inflating oil prices, they will simply hurt their customers in a weakening global growth environment.

What oil prices are showing is simply that we were living a mirage of bullish estimates and artificial inflation of prices, and it lasted very little.

If you want to be bullish oil from here you need to believe in three things:

  • OPEC greed (probable)
  • Global demand growth rising (improbable)
  • Rates falling and leveraged bets increasing (unlikely)

The reflation trade never existed. It was simply part of the fallacy of synchronized growth, and it is dissipating alongside the central-planned myth of GDP growth by design.

About Daniel Lacalle

Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

2 thoughts on “Oil oversupply a ‘double-edged sword’ for OPEC (CNBC)

  1. So, essentially, prices of oil futures were over inflated relative to expected spot price due to bets that OPEC would succeed in inflating oil prices by restricting oil production and now we are beginning to see that OPEC is failing and contango is in effect?

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