What The Hell is OPEC Doing?

And an opportunity ahead in the refinery side as this huge energy player cracks a key support level..

This is what the opposite of a trade war looks like…

Good morning:

Let’s talk about OPEC+. (I’ll be doing so live at 8:45 ET this morning… join Free)

These individuals are the puppet masters of the global oil market, and they're currently playing hardball. They control the BULK of global production.

But let’s step back…

OPEC+ is an expanded version of OPEC (the Organization of the Petroleum Exporting Countries), founded in 1960 by Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela.

Their original goal was straightforward: coordinating oil production policies to ensure stable prices and a regular consumer supply.

In other words, this cartel sought to control the market to increase its profits.

The "+" in OPEC+ comes from the addition of Russia and other non-OPEC producers who joined forces with the original cartel in 2016. These countries control approximately 40% of the world's oil production and around 80% of proven oil reserves.

That's enough market power to influence global oil prices significantly.

When prices drop too low for their liking, they reduce production.

A decrease in oil supply means higher prices. They increase production when they want to flood the market (usually to crush competitors or discipline their members).

More oil means lower prices—Econ 101, supply and demand.

Currently, we are witnessing something fascinating.

According to Bloomberg, Saudi Arabia is expected to push for another significant production increase at next week's meeting. This follows their surprise move earlier this month when they tripled the planned production increase to 411,000 barrels per day.

But why would oil producers want LOWER prices?

Three reasons.