Crude Oil Hits $80, Highest Since 2014 – Could Reach $100 As OPEC+ Controls Production To Milk Demands

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Oct 08 2021
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West Texas Intermediate (WTI) crude futures, the U.S. oil benchmark, crossed US$80 per barrel on Friday – the highest since November 2014. The Brent crude, the international benchmark, had already breached US$80 mark days ago. And it appears the oil price will continue skyrocket as WTI is on track for its 7 straight gains week, its longest weekly winning streak since December 2013.


Crude oil is not the only commodity that is bullish. Natural gas and coal are also rallying due to global energy crunch that is sweeping Europe and Asia. For the year, both WTI and Brent have increased more than 60%. Even the rise in the U.S. crude oil inventories this week has failed to stop the oil prices rally, thanks to economic activity rebounds and Covid-19 restrictions ease.


The pressure on gas supplies saw a surge in prices, even though European Union said they have sufficient gas in storage to last through winter. As China is forced to ration power due to near-record high thermal coal prices, it has ordered coal miners in Shanxi and inner Mongolia – its two biggest coal-producing regions – to ramp up annual production capacity by more than 160 million tonnes.

Crude Oil Prices Hit 7-Year High Since 2014 - 9Oct2021

Even India is facing  power crisis because demand for power jumped sharply as the country’s economy picked up after a deadly second wave of Coronavirus. While power consumption in the last 2 months shot by almost 17%, the global coal prices increased by a whopping 40%. To make matters worse, 70% of the electricity in India is generated using coal.


But the primary reason the crude oil goes “BOOM” is because OPEC (Organization of Petroleum Exporting Countries) and allies led by Russia have refused to add more oil than the initial agreement of raising production by a modest 400,000 bpd (barrels per day) in November, despite the recent fuel shortage. Without Donald Trump around, the OPEC+ is back to its old game.


If Trump is still the president, he would most likely unleash some tweets, warning and ordering Saudi Arabia to pump more oil to bring down the price. And if Saudi deliberately drags its feet, Trump would threaten to tap the Strategic Petroleum Reserve. Or he would trumpet new oil deals that may not exist in the first place, just to spook the crude oil market.

US Oil Production Shale Producers - President Donald Trump

Under President Joe Biden, nothing is done to stop exploitation or manipulation of oil production, which together with excessive speculation, would send crude oil prices to the roof, as can be seen now. It was only on Wednesday that the U.S. Energy Secretary Jennifer Granholm said Biden administration was considering tapping the country’s emergency oil reserve.


However, by Thursday, the U.S. Energy Department made a U-turn and said it has no plan to tap into the nation’s oil reserves to help quell rising fuel prices. The US$3 gas at the pump is painfully affecting Americans, which could pose serious political problems for Biden. The POTUS said “all tools in the toolbox” are under consideration to combat high energy prices, yet, he is doing nothing.


Despite White House’s calls to OPEC+ to ramp up production, OPEC+ announced on Monday that it would only gradually add supply to the market – suggesting that Saudi, the de-facto leader of OPEC, has very little respect for “Sleepy Joe”. If the clueless U.S. president does not do something fast, some analysts said a cold winter could send oil prices to above US$100.

Sleepy Joe Biden

Goldman Sachs predicts the Brent crude could easily reach US$90 per barrel by the end of December. Meanwhile, Bank of America said oil could hit US$100 per barrel because the energy crunch has gone global. At US$100, it would roughly translate to US$4 per gallon at the station (US$4.17 was the all-time high for gas prices after oil prices hit US$145 per barrel in 2008).


Yes, US$100 per barrel is absolutely possible. Saudi and Russia are leveraging on the current global energy crisis, along with a weak and indecisive Biden administration, to control production and milk the oil revenue as much as possible, after a difficult year during Coronavirus pandemic. Saudi wanted to reduce its budget deficit to 1.6% of its GDP in 2022 with the help of high oil prices.


The plan is to slowly milk the profit from the black gold. However, OPEC+ has to be very careful so that the crude oil price does not spike too fast and too high as it could destroy economic recovery. Saudi has been cutting its crude oil selling price for Asian buyers following the price rise in an attempt to grab market share and to retain its dominance.

Crude Oil - Pumping

So, the good news is, even if the crude might jump to US$100, it would not sustain. While it’s true that the global economy is recovering from Covid-19, it is not strong enough to accept such a ridiculous price. Besides, Saudi has to compete with the U.S. oil producers. The total number of oil and gas rigs in the U.S. count is now at 533, up 264 from the same time last year.


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I’m all for expensive petrol, high cost of such does not bother me the least, neither anyone else in Bolehland.

Before you shag yourselves in righteous indignation about the poor and the deserving masses, let me clue you up about vehicles making the lives of our monkeys so easy that they wouldn’t walk two steps anywhere and forever need their “armour” for protection for anything like phcuking turtles need their shells, the cheap bodies of their cheap crap cars will shield them from the bad of their rotten miserable lives.

My favourite kaks, young and all, walk all the way from the kampong to sell food. I am deeply impressed by that, usually buy all the food I don’t need from them…

Yes, even my dogs, cats, and the neighbours’ would be delighted more of you fcuking lazy, overweight bastards get out of your cheap lanciao (not Lancia) fcuking tin cans and walk. I am only saying this for your oink good

And the good of the taxes I paid and pay to keep you alive and wheezing away.

Hence these days we have all the ravages of the affluent, heart diseases, obesity, diabetes, etc, most to do with those immuned to just a little bit of exercise. When the fcuking obese monkeys finally get out of their tortured cars after three days of struggle, they go on to obstruct any path like four walking abreast, blocking all from their right of access.

Of course those who are fit – and driving real and expensive cars have to subsidise the waddling obese fcuks their medical bills, stay in hospitals, and maybe expense for their early funerals. And all mostly because these ohcukheads cannot look after themselves while they make life a great big pain for those who can.

Our monkeys will lecture about the necessity for cars, but let me remind our dumbfcuk obesed, lazy monkeys we hear of those who walk far to school or work, and those who travel far on foot and public transport anywhere and everywhere. There are plenty who walk far or near to sell their ware or service.

Well, the moral of the story is there’s nothing that would please me more than not just expensive petrol but very very expensive petrol. That would get a good many to start using their legs unless petrol cost “an arm and a leg” in which case there’s no use for them, you might as well have them chopped off before some weird religion chops them off, Alhamdulilah!.

Not to mention you won’t be unhappy if your favourite Ah Long uncles drop by to repo the cars you can’t fcuking afford…

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