If you read or listen to the press around the world, COVID is increasing in Europe and North America which means people are more likely to stay at home or not drive vehicles. Ever since 1973, the world has paid attention to OPEC as they raised prices in that year. OPEC believes global oil demand will rebound more slowly in 2021 than previously thought because of rising coronavirus cases.
In an article by Alex Lawler of Reuters, demand will rise by 6.25 million barrels a day (b/d) next year to 96.26 million b/d, the growth is 300,000 b/d less than expected a month ago.
OPEC is expecting demand to be down until mid 2021, by then hopefully people around the world will be getting the vaccine. OPEC would love to raise production but for now, it is lowering them.
Linking to dividend paying stocks, President Trump often said he was a cheerleader for the economy, but those in the commodity business live and die based on supply and demand. When demand is high, prices move upwards, when demand is low, prices move downwards. Fact check your favorite politician with forecasts from commodity producers, you will receive a fuller picture, in order to make a decision.
There are more questions than answers, till the next time – to raising questions.