Via Business Insider comes this piece from Mohamed El-Erian: “The Oil Market Seems Surprised By OPEC — It Shouldn’t Be”
- Judging from today’s sharp reaction, the oil market is surprised by OPEC’s decision not to reduce its production ceiling in order to curtail the accelerated price decline which now totals 25% for the year.
- It shouldn’t be. OPEC has a history of opting for strategic rather than tactical decisions; and, this time around, it may have done so from a position of caution rather than overwhelming strength.
The article is well worth a read. Big thanks to the people at Business insider for publishing it
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Still leaves me scratching my head …
The smart side was on no cuts from OPEC …. and yet look at the reaction.
On a personal basis I am always wary of the ‘is it priced in?’ question. I usually start from the position of ‘I have no idea’. Then respond as the price responds. But, that’s just me. Am I right? … Well, I have no idea. Each to his own.
Regular readers will know I do like ‘the trend is your friend’ (I even had one scallywag quote it back at me re the NZD the other day!
). Trends do have a tendency to … well … trend.
