Hedge funds are back in buying mood as of last week, with hopes of further OPEC+ production cuts adding optimism to markets. Analyst predictions that U.S. shale growth will start to slow down next year has also added to this bullish sentiment. But not everyone agrees with those shale claims, Rystad Energy came out with a forecast this week that U.S. shale would keep growing no matter what oil prices do. In the meantime, a real showdown of external forces in Iraq could threaten global oil supplies next year. Oil prices dipped Friday morning in the absence of an official deal from OPEC, but bullish optimism is undoubtedly still there.
OPEC Seals Deal, but Internal Fighting Among Members Persists
While an official announcement has yet to be made, OPEC has reportedly agreed to increase production cuts for OPEC+ after the monitoring committee earlier recommended the production cuts be increased from 1.2 million bpd to 1.7 million bpd.
But nothing has been finalized yet. Two issues now dog OPEC and its allies: 1) the persistent issue of noncompliant members such as Russia, Iraq, and Nigeria, and 2) how to divvy up the "extra" 500,000 bpd of cuts.
The second of those issues threatened to derail the talks late on Thursday, with Angolan officials walking away from the negotiating table, unwilling to agree to cut an additional 11,000 bpd. Iraq, too, was reluctant to add to its cuts, which it hasn't complied with yet anyway. Angola eventually came back to the…
Hedge funds are back in buying mood as of last week, with hopes of further OPEC+ production cuts adding optimism to markets. Analyst predictions that U.S. shale growth will start to slow down next year has also added to this bullish sentiment. But not everyone agrees with those shale claims, Rystad Energy came out with a forecast this week that U.S. shale would keep growing no matter what oil prices do. In the meantime, a real showdown of external forces in Iraq could threaten global oil supplies next year. Oil prices dipped Friday morning in the absence of an official deal from OPEC, but bullish optimism is undoubtedly still there.
OPEC Seals Deal, but Internal Fighting Among Members Persists
While an official announcement has yet to be made, OPEC has reportedly agreed to increase production cuts for OPEC+ after the monitoring committee earlier recommended the production cuts be increased from 1.2 million bpd to 1.7 million bpd.
But nothing has been finalized yet. Two issues now dog OPEC and its allies: 1) the persistent issue of noncompliant members such as Russia, Iraq, and Nigeria, and 2) how to divvy up the "extra" 500,000 bpd of cuts.
The second of those issues threatened to derail the talks late on Thursday, with Angolan officials walking away from the negotiating table, unwilling to agree to cut an additional 11,000 bpd. Iraq, too, was reluctant to add to its cuts, which it hasn't complied with yet anyway. Angola eventually came back to the table.
The unpleasantries during the meeting were so severe that the cartel canceled its gala dinner and boat cruise scheduled for Thursday evening.
395,000 bpd of the cuts are to be assigned to OPEC members, with the remaining 105,000 to be split among non-OPEC members.
An official announcement of the cuts was not made on Thursday, most likely due to heated disagreements, although the official line is that the announcement will not be made until late on Friday when OPEC presents the plan during the non-OPEC leg of the meeting.
$1B Milestone Makes Renewable Funds Mainstream
The first close of BlackRock's Global Renewable Power III (GRP III) fund has hit the $1-billion mark, with commitments from 35 investors globally. Its final target is $2.5 billion, sometime in the fourth quarter of next year.
The GRP III, is - as the name would suggest - BlackRock's third renewable energy fund, focusing on generation, storage and distribution. BlackRock has been pushing renewables since 2011, and going forward, will focus on wind and solar plays in OECD markets (particularly Europe, the U.S., Turkey, Australia, Japan, Israel, Chile).
In other words, BlackRock isn't afraid of a subsidy-free renewables market. It's got a $1-billion close that says that global power generation is indeed shifting, and it sees the new numbers as moving from two-thirds fossil fuels to two-thirds renewables over the next few decades.
Investors are extremely hungry for renewable assets - and this proves it.
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