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February Advisor Preview | Materialization of OPEC Cuts and Geopolitical Uncertainty

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January marked the beginning of a price trajectory in transition, influenced by a manifold of market drivers unseen by the naked eye. In this edition of the Breakthrough Advisor, the Applied Knowledge Team provides valuable insight into those unsung factors, delivering a holistic perspective of energy market fundamentals that are important to consider when discussing full transportation supply chain visibility.

Furthermore, they discuss the diesel price ramifications of oil production cuts by some of the world’s largest producers, and the global oil market impacts of geopolitical conflict between the United States and Venezuela. In total, they focus on the three primary segments of energy market analysis; world oil market fundamentals, global economics, and the encompassing risk environment, and consider each component’s impact on the price of fuel used to move goods to market.

 

OPEC Production Cuts Come to Fruition

Oil price behavior remained relatively depressed from the end of 2018 through the early days of 2019. However, the OPEC+ oil producers’ December announcement to cut oil production by 1.2 million barrels per day in the first half of 2019 came to life in January, with Saudi Arabia and Russia leading the charge of tempered crude output to bring global supply and demand closer to balance. In turn, crude oil prices rebounded, muting some of the downside price pressure of slower economic growth on a global scale.

How much oil supply has been removed from the market and what do these production cuts mean for market dynamics in the year ahead? Learn how these events factored into the crude oil landscape and influenced diesel prices in this month’s edition of the Breakthrough Advisor.

United States vs. Venezuela

Economic struggles, civil unrest, and a faltering oil industry have dismantled Venezuela’s global rank. US President Donald Trump’s steady criticisms of Venezuela’s government – specifically President Nicolas Maduro – have helped citizens lobby for a revamped government, creating an uncertain future for the oil-dependent economy and for the global oil market. Moreover, the Trump Administration decided to target Venezuela’s heavy crude oil – one of the nation’s most vital commodities – as a deciding factor of the trade relationship between the two economies, imposing sanctions on heavy oil exports destined for the US Gulf Coast refining sector. The political uncertainty within Venezuela spans far and beyond domestic borders, with potential impacts for the energy market and various trade counterparts.

What are the global implications of US sanctions on Venezuela, and how will this decision impact crude oil trade and refined product production – including diesel – for the foreseeable future? Find out in the February edition of the Breakthrough Advisor.

This edition of the advisor publication presents a detailed synopsis of the energy market’s most pressing news and data-driven insights concerning your fuel management strategies. If interested, you can gain further details into ever-changing fuel market dynamics and trending topics by signing up for the Breakthrough Advisor Brief or contacting the Applied Knowledge Team directly.

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