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#IGCommodityChat: Oil

DanielaIG

What is the murky future of Oil?

Continuing our #IGCommodityChat and following this week's chat on gold, join us on Thursday the 29 November at 1pm (UK time) to discuss the future of the oil market with industry advisor Malcolm Graham-Wood and Spencer Welch, director of oil markets at IHS Markit.

The demand for oil has increased over the last few decades due to the rise of emerging economies and the requirements of the transport industry. However, in recent years, concerns have been raised about how sustainable oil supply and demand actually are. In fact, the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, mainly Russia, have restricted oil production in order to provide support for oil prices.

The most significant force influencing oil demand is the rise of renewable energy. As investment in alternative energy grows, the future of the oil industry is starting to look like one of decline. Oil and gas companies might be forced to rethink their long-term strategies in order to secure a role for themselves in the new energy economy. Although it will likely be a number of decades before the oil market sees the full consequences of these changes, OPEC has lowered its predictions for world oil demand for the rest of 2018 and 2019.

With so much uncertainty surrounding the future of the oil market, we’ll be taking a look at how the industry changes might influence the price of oil. You can watch the live stream at 1pm (UK time) on Thursday 29 November via the trading platform, or our YouTube , Facebook  and Twitter  pages.

Submit your questions now

There will be a live Q&A during the session, so you can put forward any topics you’d like Malcolm or Spencer to discuss, or any questions you want answered. Post your questions to the #IGCommodityChat using the comments section below, and check out one of the latest #IGChats we recently posted on gold to get a flavour of what to expect. The show will be broadcast live from within the dealing platform as well as via a special YouTube link and on various social channels. 

Oil discussion topics

  • The discussion will cover a wide range of topics that relate to oil, including:
  • How the agreement between OPEC and non-OPEC countries will influence supply
  • The impact of political sanctions on oil producing countries
  • How the emergence of alternative energy sources has impacted the oil market
  • How the flotation of the Saudi Arabian Oil Company (Aramco) will impact the oil market


8 Comments

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ooooh I have an interested in this. If the below is the case (and it happens), how long can these countries continue pumping below market cost of extraction?

133247178_2018-11-2808_58_11-Whatisthebreak-evenfortopoilproducersbycountry_-Quora.png.34c8de1ce09f52c1768564f594bb23c0.png

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how the hell is the OPEC cartel aloud to function? I don't get how any form of monopoly or price manipulation is any other industry is seen as illegal, yet in the middle eastern world it seems perfectly acceptable? I mean COME ON. why aren't international bodies intervening ?

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OPEC are set to meet in Vienna next week. Saudi have said they’re looking for stability but not willing to do it alone. What’s the likelihood of a favourable outcome which will be bullish for oil?! 

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Saudi said they were not willing to 'cut production' alone, knowing they would get another slap across the wrists from Trump if they do. The other big OPEC producers and Russia can cope with price as is (see graph above), Russia also seems unwilling to cut production. So it seems unlikely there will be an outcome from next weeks meeting that would cause a rise in bullish sentiment.

The OPEC cartel exists because no one seems willing to start a war with Islam and they have all the oil, the UN is far too busy right now trying to get the UK to hand the Falklands over to Argentina and forcing countries into their Migration (open boarders) Pact.

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I this the same thing that happening  as it did in 2015 and 2016. Regarding the Saudi position is it correct to assume there is a high possibility that they have transacted very large swap transactions when the price was around US$70 to then fix the oil price for the next 12-24 months and hence that has caused oil prices to collapse as the counter party facing Saudi oil has been very active filling that extremely large transaction. In short is Saudi oil really that bothered about the oil price at the moment and  when these large transactions expire they will then be selling at market price and that could then affect their approach?  My other question is at what point do refineries start to dump oil products onto the market in panic and what are the chances we will see the same weekly DOE data as we did in Q1 2016? 

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will electric cars have an effect on oil prices? and if so how much and when are we likely to see this come through?

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