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Share prices of oil producers bounced as crude prices rose, following the surprise OPEC+ decision to cut output this year, Ben writes. Driving the news: Companies seeing gains Monday included huge independents like Marathon Oil (roughly 10%) and ConocoPhillips (9%), and majors Chevron (4%) and Exxon (6%), to name a few. What they’re saying: Multiple analysts raised their 2023 price forecasts and see OPEC+ looking to keep Brent crude above $80 per barrel. Threat level: The International Energy Agency said oil markets were already slated to tighten this year. The new cuts “risk exacerbating those strains and pushing up oil prices at a time when strong inflationary pressures are hurting vulnerable consumers.” How it works: One thing that may have swayed OPEC: confidence that they won’t prompt a U.S. supply surge that blunts the price increases. “The U.S. shale industry … seems stuck on a lower growth trajectory, and the limited threat of a shale supply response may have emboldened OPEC+,” writes Ben Cahill of the Center for Strategic and International Studies. The intrigue: The White House response was mild compared with anger over OPEC+ cuts announced last October ahead of the midterm elections and amid higher energy prices. The National Security Council’s John Kirby told reporters the new cuts are not “advisable” given “market uncertainty.” But he noted the U.S. “strategic partnership” with Saudi Arabia despite disagreement with specific decisions. GalleryShare prices of oil producers bounced as crude prices rose, following the surprise OPEC+ decision to cut output this year, Ben writes. Driving the news: Companies seeing gains Monday included huge independents like Marathon Oil (roughly 10%) and ConocoPhillips (9%), and majors Chevron (4%) and Exxon (6%), to name a few. What they’re saying: Multiple analysts raised their 2023 price forecasts and see OPEC+ looking to keep Brent crude above $80 per barrel. Threat level: The International Energy Agency said oil markets were already slated to tighten this year. The new cuts “risk exacerbating those strains and pushing up oil prices at a time when strong inflationary pressures are hurting vulnerable consumers.” How it works: One thing that may have swayed OPEC: confidence that they won’t prompt a U.S. supply surge that blunts the price increases. “The U.S. shale industry … seems stuck on a lower growth trajectory, and the limited threat of a shale supply response may have emboldened OPEC+,” writes Ben Cahill of the Center for Strategic and International Studies. The intrigue: The White House response was mild compared with anger over OPEC+ cuts announced last October ahead of the midterm elections and amid higher energy prices. The National Security Council’s John Kirby told reporters the new cuts are not “advisable” given “market uncertainty.” But he noted the U.S. “strategic partnership” with Saudi Arabia despite disagreement with specific decisions.
