Earlier this morning, a Bloomberg article, unexpectedly, sparked a debate among my team partners about whether to funnel more cash into the oil trade in our macro portfolio. We have already got some skin in the energy game through an alternative trading program that has been performing right on cue, no surprises there, just steady as she goes. But hey, why not stir the pot a little, right?
Here is a section:
Oil slid for the second day as Saudi Arabia was reportedly committed to increasing output in December, while Libya named its new central bank governor, opening the way to reviving some crude production.
West Texas Intermediate dropped almost 3% to settle below USD68 a barrel while global benchmark Brent slid to just above USD71 a barrel. Saudi Arabia is ready to abandon its unofficial oil price target of USD100 a barrel in a bid to regain market share, the Financial Times reported, citing people familiar with the country’s stance.
Representatives from Libya’s rival eastern and western administrations signed an agreement to name Naji Issa as the new governor of Libya’s central bank, a move aimed at ending an impasse over the stewardship of the regulator that had crippled oil exports. Libya’s eastern-based government has also promised to reopen the country’s oil fields shortly, the United Nations’ envoy to the OPEC state, Stephanie Koury, said Thursday in a televised press conference.
The potential revival in Saudi and Libyan production comes after crude earlier this month fell to the lowest since 2021, hurt by the prospect of additional supply from OPEC+ and China’s dour economic outlook. The International Energy Agency has said global oil markets will be oversupplied next year with or without extra OPEC+ supplies because of surging output from outside the group.
“There is no room for more OPEC+ oil on the market if the cartel wants an oil price close to USD80 in 2025,” analysts at A/S Global Risk Management said in a report. “We assess that the Saudis are trying to put significant pressure on the quota cheaters.”