For the past six months, maybe longer, it's been widely reported there is a "deficit" in crude oil worldwide. I have no idea whether that is true, but that certainly, currently, is a meme: a crude oil deficit worldwide.
So, good news that OPEC+ will (gradually) increase production.
The operative word: production.
I think this data point is accurate: US demand for crude oil is soaring. We're seeing similar stories worldwide, particularly in India. My hunch: the US and India are not islands of prosperity and growth. My hunch: demand for crude oil is soaring around the world.
Interestingly enough, I think folks forget that upwards of 50% of Saudi's production is consumed locally.
There were reports that Russia's exports decreased m/m even as it delivered record amounts of crude oil to the United States.
Resident Biden said he was "glad" to hear that "OPEC" was sticking to plans to increase production.
Head fake.
Digression: how bad might the global crude oil deficit be? Generally, residents and presidents in the White House don't use the bully pulpit for things they are not concerned about. Prior to the debacle known as the "Great Evacuation," the lead story was Resident Biden asking OPEC to open the taps. That story disappeared when the Afghan evacuation began and Hurricane Ida hit. That speaks volumes. When a situation rises to the level that gets the resident's attention, it has to be serious.
Back to the post.
As noted, I don't think the US and India are islands of prosperity and growth. My hunch is that Saudi Arabia's domestic consumption is also increasing. This sort of reminds me of the Red Queen. OPEC's gradual increase in production will be offset to some extent by domestic consumption.
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