Thread by @anasalhajji

Thread on #oil
1-6 Over the years, I have done a lot of work on the optimal price of oil

OPEC leaders will operate in the sweet spot. Where is the sweet spot now?

Based on my mode, we are already in it. Things start getting sour when Brent is above $75, bitter below $68. #OOTT

2-6 The above are rounded numbers. Of course, the actual results are not rounded. The model is based on several assumptions. The main one is that major producers focus on the long run. Their objective is to prolong the demand for oil as much as they can. #SaudiArabia #OPEC #OOTT

3-6 Short-term fluctuations above $75 or below $68 have no impact on the "sweet spot". Major oil producers should increase production if the price is TRENDING above $75 and prepare to cut if it is trending below $68, if they want to stay in the "honey barrel"!
#Oil #OOTT #OPEC

4-6 If the main assumption is violated (see above), then we are in the "hit & run" scenario. Major producers would let oil prices increase to whatever level and enjoy the high oil revenues .... until the oil market collapses. #Oil #OPEC

5-6 Without realizing it, the IEA, the EU, and the Biden Administration are FORCING a "hit & run" scenario. It will be disastrous for the world. Only then, US Congressmen & Senators might realize the importance of the balancing role Saudi Arabia and other OPEC+ members play.

6-6 Conclusion: Consumers and producers should enjoy being in the "sweet spot" and try to stay there! It is good now, and good later.

The only problem is: as major macroeconomic variables change, the sweet spot changes!
#oil #OOTT #SaudiArabia #Russia #China

Typo: based on my model