Oil rises hard
Brent is hovering around $100, a psychologically crucial round level. However, it would be a mistake to call it a lull. In our view, the current equilibrium could break at any moment, as geopolitics is now working for the bulls, while the economy, monetary policy, and technical market analysis are on the bears' side.
Oil is performing better than the market, thanks to unexpected comments from Saudi Arabia about its willingness to cut production when the world is suffering from energy shortages.
This was a clear signal that OPEC continues to target historically high oil prices, preferring not to fight for market share as it did in 2014. Back then, however, Saudi Arabia had to compete for the market with the rapidly gaining US and Russian production. The latter has now moved into the lame duck category, where a 5-15% drop in output over the next 12 months would be excellent news.
