Oil prices are not very likely to hit $100 a barrel again even though the OPEC+ is set to cut production from next month, says John Kilduff – Founding Partner of Again Capital.
Kilduff defends his view on CNBC
Last week, the Organisation of the Petroleum Exporting Countries confirmed plans of lowering output by 1.16 million barrels a day as Invezz reported HERE. Still, Kilduff said today:
OPEC+ last week caught the market a little short. They timed it well. [But] I’d point out that historically OPEC doesn’t have great track record in terms of trying to rescue the price by cutting.
Also on Wednesday, Energy Secretary Jennifer Granholm signalled the U.S. wants to refill its Strategic Petroleum Reserves (SPR) to levels seen before the Ukraine war.
That sent oil prices to their year-to-date high of over $83 a barrel this morning.
Saudi Arabia to maintain supply to Asia
Interestingly, Saudi Arabia reportedly plans on maintaining full supply to several North Asian buyers despite the recent OPEC announcement.
On CNBC’s “Squawk on the Street”, Kilduff said it’s likely because the de-facto leader of the oil producing nations wants to capitalise on China coming back online and expanding its market share in the region.
So, it’s not all bad news. I don’t think it’s an automatic run to $100 a barrel. I think we have to have some more problematic issues to hit the tape. So, I’m trying to stay calm and carry one.
“XLE” – the Energy Select Sector SPDR Fund is up nearly 4.0% versus the start of the year at writing.
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