June 22, 5:00 pm EST
We’ve talked about the big OPEC decision this week, and the prospects for oil prices.
When we get a market that thinks they know the outcome, we get a market that begins leaning too hard in one direction. And that creates an market outcome that can be asymmetric (i.e. lopsided). That’s what we had today.
In this case, Trump’s verbal attacks on OPEC’s price manipulation generated a media frenzy surrounding the OPEC meeting. And with the media swarming, the oil ministers seemed happy to oblige with commentary and pontification. And that set expectations for the outcome.
And this morning, OPEC released their communique, but it was far from the clean production increase the market was looking for. With that, we got this chart …
It went straight up. Oil was up almost 6% on the day and nearing $70 again. And this lack of enough action (as we should expect) from OPEC, to balance the oil market, may serve as a catalyst to push oil much higher from here (which serves OPEC’s interests).
And as we discussed yesterday, with high oil prices now squarely on the radar (for Trump, the media and the market), we may begin seeing oil prices weigh on stock prices.
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