Confusion in the Oil Markets
Newsletter No. 42
Good morning,
I'm excited to be sending you the latest edition of The Upside. I hope you are all enjoying the holiday season and want to help you stay informed with highlights of the oil and gas industry and King Operating Corporation.
This Week's Headlines
Some Hostages Released, But Fighting Continues
The Rice Report
OPEC+ Production Cuts Bring Confusion to Oil Market
Petrobras CEO affirms Brazil Joined OPEC+ Without Production Quotas
Some Hostages Released, But Fighting Continues
The cease-fire between Israel and Hamas fell apart amid accusations of Hamas firing at Israel. Officials are actively working to reinstate a humanitarian pause.
As some hostages, such as Americans Abigail Edan and Liat Beinin Atzili, have been released, around 137 hostages, predominantly Israelis but also a few Americans, are still being held captive. This holiday season, our thoughts and prayers go out to them and their families.
The ongoing uncertainty, of course, adds an extra layer of tragedy. All of this underscores the urgent need to prioritize a path toward peace and compassion for all affected lives.
The Rice Report
King's Chief Growth Officer, Eric Rice, gives valuable insight into today's U.S. and global economy, discussing credit card debt, holiday spending and the GDP. Watch the full video here.
OPEC+ Production Cuts Bring Confusion to Oil Market
The recent decision by OPEC+ to cut oil production by 2.2 million barrels per day in early 2024 left the oil markets confused and disappointed. The lack of clarity on which countries would make specific cuts led to uncertainties, causing oil prices to fall. The confusion increased as expectations for more significant cuts were not met. Other factors, like Brazil joining OPEC+, rising gold prices, a legal win for the London Metal Exchange, potential mergers in the oil sector, and geopolitical events, add complexity to the energy landscape. These are all things I've discussed recently on our blog. You can read about these topics and more here.
Petrobras CEO affirms Brazil Joined OPEC+ Without Production Quotas
According to Brazil Petrobras CEO Jean Paul Prates, set to join OPEC+ in January, will not be subjected to production quotas
In an interview, Prates emphasized that Petrobras, as a publicly-traded company, cannot have quotas imposed. Brazil is currently producing around 3.7 million bpd. Petrobras, which makes up the majority of Brazil’s production (around 2.2 million bpd), aims to boost its production alone by 61% to 3.46 million bpd by 2030.
The decision comes after OPEC+ announced Brazil's inclusion, sparking speculation on its participation in voluntary cuts for 2024.
As always, if you'd like to talk to someone about King and are an accredited investor, you can fill out your information here or schedule a Zoom conversation with one of our SVPs here and someone will reach out.
Or, if you would like to listen to my book, "The Upside of Oil and Gas Investing," go here. We would also be happy to send you a signed copy of my book. To receive that, send your name and address to info@kingoperating.com.
In the News
Interview with CBS News New Orleans to discuss the impact that the ongoing Israel-Hamas War could have on oil & gas prices throughout the industry.
Recommended Reads
Revenues of Russia's top oil and gas producers fall 41% in first 9 months of 2023
Dutch Pension Fund PMT Sticks With Nine Oil and Gas Companies
US oil and gas extraction is at a new high and will likely stay near record levels through 2050
Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don't hesitate to reach out.
All the best,
Jay
