OPEC, Russia eating US lunch as oil demand soars

OPEC, Russia eating US lunch as oil demand soars

Oil topped $57 per barrel on Friday evidence that global oil supplies are tightening much faster than many had expected.Continue Reading BelowPart of the commodities rally is being driven by China and India where oil demand has exceeded pre-COVID-19 levels. Despite record-breaking oil purchases by China and attempts to hoard oil reports show that the country's inventories have fallen to the lowest level since February 2020. Meanwhile, U.S. oil supplies are tightening as stockpiles fell last week to 475.7 million barrels, the lowest level since March according to data from the Energy Information Administration.And this week, OPEC members led by H.E. Mohammad Sanusi Barkindo, Secretary-General, held policy steady further juicing the market.The U.S. for their part is signaling more restrictions on domestic production allowing a power shift back to OPEC Plus and Russia in the global power structure. The group now projects that the worldwide market will be in an oil supply versus demand deficit by as much as 2 million barrels of oil a day as early as May of next year and remaining so for 12 months, at least.President Joe Biden and his administration are already facing criticism for killing the Keystone XL pipeline and the pause on oil and gas leases on Federal lands will now have to face the consequences of sharply higher oil prices that could hurt the pace of the U.S economic recovery. BITCOIN ROBS FROM GOLD AS PRECIOUS METAL SINKS BELOW $1,800 We expect that global oil demand will get back over 100 million barrels later this year and with more oil possibly from Iran and OPEC we may need to see prices above $65 a barrel to meet demand. However, U.S. producers will only get a slice of that action as they will be hampered by the Biden Administration. Banks and pension funds will avoid oil and gas investment to be more politically correct making it even harder for American oil companies to get approval for pipelines and other projects. That will lead to underinvestment in the U.S. oil and gas sector thereby hold back production which has fallen to 10.5 million barrels a day down from about 13 million barrels a day a year ago.Less U.S. oil production will allow OPEC and Russia to keep supply tight and to control prices with less of a threat of losing market share to American shale. That realization that the U.S. is retreating from the global oil producing stage is causing an oil buying frenzy on global markets putting more money and power in the hands of the OPEC cartel.The Biden Administration'ss Climate crusade on the other hand will help us rebuild OPEC and Russia at the expense of U.S. producers and ultimately our own economy.American consumers that have been more accustomed to lower oil and gas prices will have to prepare for higher rates as the U.S. leaves the world stage shifting back to a consuming country as opposed to a producing country.In the meantime, OPEC and Russia will regain their dominance over oil prices while America slept. Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at [email protected] .

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