What Does OPEC's Production Cuts Mean for Oil Prices?

(10/6/22) OPEC's announcement of a 2-mil barrel per day cut in oil production was twice the amount expected. The Biden Administration immediately accused the cartel of being in cahoots with Russia; what this does mean is less oil production as demand increases heading into winter, suggesting higher oil prices to come. Meanwhile, the US now plans to tap another 10-mil barrels of oil from the Strategic Petroleum Reserve, already down from its 48-days' supply to just 22-days' supply, the lowest on record since 1990. The Administration's aggressive posture against oil companies is limiting their resolve to risk capital to drill new wells, build new refining capacity, and improve domestic oil security. This, however, spells opportunity for investors, as oil prices are now targeting to meet or exceed $90/bbl, and a slight pull-back beforehand will provide an excellent opportunity to increase exposure to oil stocks.

Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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