Stocks at Records as Wall Street Bets Big on OPEC Deal

thestreet.com via Yahoo News ^ | November 30, 2016 | Keris Alison Lahiff

[John W]

Stocks climbed Wednesday morning as crude oil rocketed higher on high hopes for a production deal among major oil-producing nations.

Crude oil surged as much 8% Wednesday as reports leaked that delegates from Organization of Petroleum Exporting Countries were close to reaching an agreement on production.

[xzins]

Enter the US frackers.

Oil will remain below $3 because of them.

And Trump is right. Let’s go for energy independence. Tell the king of Saud that he can go eat pork.

[JamesP81]

Oil really can’t get much about $70 / barrel because of fracking.

I think that puts us in the 2.50 / gallon range for gasoline.

A more interesting thought here is if this indicates the Saudis are de-escalating their economic feud with Russia. Makes me wonder what changed.

[Eric in the Ozarks]

$1.72/9 here in mid-Missouri

[WMarshal]

I never understand why big-money loves expensive energy so much when it clearly chokes off the other 90% of their investments. Cheap energy is the lifeblood of commerce and manufacturing.

[hardspunned]

If I have to pay the ridiculous price of $2.50/gal (sarc) to put these Arab blood sucking ba$tards out of the American energy market, so be it. The house of Saud will be in front of DJT head scarfs in hand begging for mercy soon enough.

[JamesP81]

Keep in mind oil is a commodity, and therefore fungible. Very little of our oil physically comes from the Saudis. Most of our imported crude comes from Canada.

Saudi and the Opec countries can manipulate the worldwide price, though. Really the only way to insulate yourself from that completely is to make private trade agreements with oil exporters separate of the commodities market. Exporters, for obvious reasons, probably won't do that. Why sell for a lower price in a trade agreement when I can do futures contracts on the world market and make more money?

The Saudis are totally reliant on oil money. They'll play games with the price, but they can't afford to cut the spigot off. Further, the amount of manipulation they can get away with is a lot lower now because of fracking.

The biggest threat the Saudis hold over our heads is to start trading oil in a currency other than the US Dollar. My concern is that they're trying to repair relations with Russia and put Saudi in a better position to exercise, or threaten to exercise, that option to try to lever us into helping topple Assad in Syria. It might be that they felt if they were feuding with Russia they couldn't afford to piss us off. If they end the feud with Russia, their options are more open.