Tom Luongo's take on OPEC+ output cut of oil
Last week's market movement seemed to coincide with Tom Luongo's assessment that the six-month decline in oil was exaggerated.
However, he discovered that OPEC+ was planning a surprise output cut that same Sunday morning. This announcement led Brent Crude to gap open at roughly $85 per barrel, WTI to go above $80, and the Brent/WTI spread to trend towards $3, which is very excellent news for US producers and exporters. Despite a more optimistic perspective now than in January, the oil market still has a fundamental supply and demand mismatch.
Luongo feels that the heightened volatility in the oil market is causing the instability in the interest rate and currency markets. He also says that using volatility to target the US stock market was a method to discredit Trump while pushing the US dollar lower.
Finally, he contends that creating a market too volatile for the average person or small hedge fund to trade is a sure way to ruin it, as it can flush out the little specs and reduce market liquidity, making it the playground of those with the deepest resources.
Source:
Tom Luongo, 7 April 2023, "Luongo: Davos Runs Into The OPEC+ Buzzsaw", Zerohedge, https://www.zerohedge.com/geopolitical/luongo-davos-runs-opec-buzzsaw?utm_source=