In the investing world, you want to know the cost of the inputs to the stock. What costs affect the stock the most? when you have an answer, you can determine if those how much do those costs have to go up before the margins mean no longer profits. There are many companies in the commodities related business and it is easier to see there. For example, some of the oil companies have been very profitable over the past couple of years, at what price of oil will they make money?

In an article by Alex Lawler, Mahe El Dahan and Olesya Astakhova of Reuters, OPEX + has agreed to delay a planned December output increase by a month. The biggest customer of OPEC is China and while growing, demand for oil is down from what it was. (partly as a result of slower growth, also China has the world’s largest solar farms or alternatives to oil).

8 member of OPEC + were due to raise output in December by 2.2 million barrels a day, that has been delayed to January 2025.

OPEC and Saudi Arabia have repeatedly said they do not target a certain price and make decisions on market fundamentals and in the interest of balancing supply and demand.

OPEC+ said the cuts of 3.66 million barrels per day will stay in place till the end of 2025. The next OPEC + meeting is for December of 2024.

Linking to dividend paying stocks, as an investor in a commodity you need to know at what price the commodity has to stay above costs in order to generate profits. Once you know the number you can easily determine if the company should be able to make profits to pay dividends. If the price of the commodity goes higher, expect higher stock buybacks and increased dividend payments. In addition, all companies have ideas of companies they would like to own, so expect more mergers and acquisitions. If those things happen, you can hold onto your stock for as long as the commodity price stays high.

There are more questions than answers, till the next time – to raising questions.