The two words that keep OPEC Oil Ministers up at night and gives them angina . . . . . "STRANDED ASSETS"

[Bla2 + 31]

No Stranded Assets today.

No Stranded Assets tomorrow. 

That's not the point.  The experts all tell us different projections as to oil demand, supply and resultant price. Some out to 2050.  For example J.P. Morgan analyst report stating $190 bbl oil 2025. (keep dreaming).  Keep in mind this projection likely has more to do with J.P. Morgan efforts to win Investment Banking business than anything else.

Understand as it relates to OPEC Oil States :. THE THOUGHT OF STRANDED OIL RESERVE ASSETS AFFECTS TODAYS DECISIONS ON PRODUCTION, EXPORTS AND SURVIVAL.

The OPEC Oil States are concerned about the next 10 years , not the oil market in 2050.  There is too much oil for at least the next ten years and that's all that matters right now. 

OPEC+ will spin narratives about future oil shortages, needed capital investment, balancing the market and general propaganda of how they are working to help all of us. 

OPEC will now hold monthly meetings in attempt to control the narrative and prop up oil prices.  They will extoll their resolute and unanimous commitment to production  cuts and promise $60 Brent by June.

No OPEC Oil Ministers will utter "Stranded Assets" in public.  That's blasphemy .   But France's Total CEO Pouyanne` said last week :

"Pouyanné  said that strict investment discipline would be vital for  . . . .   .   “Our focus is on projects that can withstand low oil prices and higher carbon costs. It’s the best way to protect against the risk of stranded assets,” the executive said.

Can Mideast economies diversify ?

Will Oil States be able to tap bond markets indefinitely to fund large budget gaps ?

Has OPEC lost control of oil pricing ?

How fast does the Green Economy grow enough to reduce fossil fuel demand and thus price ?

According to J.P. Morgan not anytime soon.  J.P. analyst says $190 bbl oil by 2025.

 

 

Edited December 8, 2020 by Bla2