El-Badri’s comments came in a speech at the Oil and Money conference that started Monday in London. According to a report at Platts, el-Badri said global investment could drop by $130 billion in 2015 from its level of $650 billion in 2014.
There have been reports that OPEC representatives would meet with Russian oil producers to discuss oil prices, and that led to conjecture that OPEC and Russia would agree to reduce production. That was enough to prop up crude prices Monday, but November Brent prices on Tuesday bounced from a low of $48.86 to a high of $49.46 as there seems to be little substance behind the rumors.
It is highly unlikely that either OPEC or Russia would agree to cut production. OPEC believes its strategy of focusing on market share is working. In fact, on Sunday, Saudi Aramco, the national oil company of Saudi Arabia, announced a cut to the official November price for sales of medium grade crude to Asian and U.S. customers to a discount of $3.20 a barrel below the regional benchmark. The October discount was $1.30.
As for Russia, it cannot afford to cut production. Oil and gas are the country’s main source of export revenue, and with crude oil prices so low Russia must pump more oil just to keep the cash flowing. Besides, Russia has always taken advantage of any cut to OPEC production to try to grab market share. This time the players may be lined up a bit differently, but the strategy will not change.
OPEC’s el-Badri is right about the lack of new investment and what that will mean for future supply. And he may be right about a price rise soon, but he did not say either how soon or how big. Those are the big questions.
ALSO READ: 3 Deutsche Bank Oil Services Stock Picks With Over 100% Upside Potential
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
