Crude Oil Market Update: February 2021
U.S. West Texas Intermediate crude oil futures continued to move higher to start the week of of February 22nd. with a push through 62$ a barrell on Wednesday’s early trading. Investors continue to look beyond rising coronavirus cases, instead choosing to focus on the prospect of lower supply after Saudi Arabia pledged to cut output in February and March.
“The self-imposed Saudi cut is keeping bulls running,” said Russell Finkelstein CEO of Grand Cayman Capital. “It will take a brave man to bet against the current bullish new price benchmark.”
Oil prices will continue to rise in response to Saudi Arabia’s decision to make a big voluntary production cuts.
Saudi Arabia, the world’s biggest oil exporter, said earlier in the week it would make additional, voluntary oil output cuts of more than 1 million barrels per day (bpd) in February and March, after a meeting of OPEC+, which groups the Organization of the Petroleum Exporting Countries and other producers, including Russia.
Grand Cayman Capital has a long term outlook for crude oil that calculates the effect of declining usage due to advanced fuel cell technologies and alternative renewable energy. The belief that crude price will decline during this 20 plus year transition period is wrong thinking. The use of fossil fuels will be at a very high price to offset the environmental effects for those who use it, both industry and individual. It is more valuable in the ground and at 100$ a barrel than in a storage tank at 50$. The oil producing community are trading crude oil futures and contracts at to offset declining usage and funny thing they have a hand it setting the price. Think about it. Its time to run with the bulls. Take the market by the horns.
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CEO Grand Cayman Capital Ltd.
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