A reluctant tip of the hat to OPEC and Russia

Alvin, if you read my comment, I mentioned that the purpose of a cartel is to restrict supply in order to increase prices. Norhing in there about doing the "right thing".

In the last year, OPEC + Russia have helped the global oil industry recover, by restricting output. This was a self-serving goal of the cartel, to get more money in the long run for their oil production.

Alvin, if you read my comment, I mentioned that the purpose of a cartel is to restrict supply in order to increase prices. Norhing in there about doing the "right thing".

In the last year, OPEC + Russia have helped the global oil industry recover, by restricting output. This was a self-serving goal of the cartel, to get more money in the long run for their oil production.

Russia has budgeted for $40 oil for 3 years, starting in 2017. Russia recently said they would be happy with $60.

And last month, Saudi Arabia started a whisper campaign to get prices up to $80 to maximize the potential value of their (potential) Aramco IPO. Then later started whispering for triple digit oil at $100, probably to see if the market could bear triple digit oil.

And of course, Trump tweeted his displeasure about artificially high oil prices, just before the Summer driving season in the U.S. and also before the upcoming midterm elections - - - U.S. voters tend to get annoyed with high gasoline prices.

So with Saudi Arabia angling for $80 to $100 oil, Russia budgeting for $40 oil and happy with $60 oil, Iran happy with $60ish oil (because that price hurts Saudi Arabia and Iran can live with $60) and all the other OPEC countries angling for their own preferred price... my general guesstimate of a Goldilocks comfort zone of around $65 for OPEC + Russia might not sound so crazy anymore.

Just my opinion; as always, you are free to disagree.

Russia has budgeted for $40 oil for 3 years, starting in 2017. Russia recently said they would be happy with $60.

And last month, Saudi Arabia started a whisper campaign to get prices up to $80 to maximize the potential value of their (potential) Aramco IPO. Then later started whispering for triple digit oil at $100, probably to see if the market could bear triple digit oil.

And of course, Trump tweeted his displeasure about artificially high oil prices, just before the Summer driving season in the U.S. and also before the upcoming midterm elections - - - U.S. voters tend to get annoyed with high gasoline prices.

So with Saudi Arabia angling for $80 to $100 oil, Russia budgeting for $40 oil and happy with $60 oil, Iran happy with $60ish oil (because that price hurts Saudi Arabia and Iran can live with $60) and all the other OPEC countries angling for their own preferred price... my general guesstimate of a Goldilocks comfort zone of around $65 for OPEC + Russia might not sound so crazy anymore.

Just my opinion; as always, you are free to disagree.