E=MC(Oil Crisis)? OPEC+ Boosts Output, Fuels Market Paradox!

Relativity of Oil Prices: A Barrel of Laughs?

Good heavens! It seems my famous equation E=MC² isn't the only thing causing a stir these days. News reaches my humble abode (a place where I mostly ponder the cosmos not commodities) that OPEC+ is at it again! They are increasing oil output apparently to the tune of 411,000 barrels per day for June. Last month they did the same. It seems these countries are determined to redefine the very fabric of economic space time! As I always say “Only two things are infinite the universe and human stupidity and I'm not sure about the former.”

A Quantum Quandary: More Oil Less Sense?

Now one might ask as I often did when contemplating the mysteries of quantum entanglement why on Earth would they flood the market when there's already a trade war brewing between the United States and China? It's like adding more fuel to a fire that's already threatening to burn down the global economy. I suppose these OPEC+ folks believe they've discovered a fourth dimension where such actions make perfect sense. Perhaps they think the market will simply adjust like a bewildered cat trying to catch its own tail. "The definition of insanity is doing the same thing over and over and expecting different results," though I am unsure if I said this or if it was said by a great man. Nevertheless it applies.

Saudi Arabia's Stand: To Cut or Not to Cut?

Ah Saudi Arabia the de facto leader of this oil producing band! They seem to have decided they're no longer willing to prop up the oil markets with further supply cuts. It appears some countries like Kazakhstan and Iraq have been naughty and exceeded their production targets. A bit like students cheating on their physics exams wouldn't you say? It seems compliance is the name of the game. Well good luck herding those cats. Herding cats are easier than getting everyone to agree in a world as chaotic as ours.

The Uncertainty Principle: Will Prices Plunge?

Friday saw oil prices taking a tumble a fall of over 1% as traders prepared for this additional supply. Brent crude futures closed down hitting $61.29 a barrel. It appears the market's a bit nervous as if it's anticipating a nasty surprise in the form of an unexpected quantum jump. Of course predicting the market is about as reliable as predicting which direction a fly will buzz next. A trade war looms over us all!

The Fifth Dimension: Output Hikes and Economic Twists

Analyst Helima Croft of RBC Capital Markets suggests the discussions are leaning towards another three month increase. It appears my fellow humans are determined to make things more complicated than they need to be. One could argue it's all relative of course. Perhaps they are trying to create a new bizarre economic paradox where up is down and black is white. "The important thing is not to stop questioning," I'd say even when those questions lead you to realize that economics is just as perplexing as quantum physics.

The Grand Unified Theory of Oil (Not Quite)

So OPEC+ plans to hold a full ministerial meeting on May 28. I imagine it will be a spectacle worthy of a Nobel Prize (though I doubt they'll be awarding one for economic theatrics). In the meantime we're left to ponder the great mysteries of supply and demand market manipulation and the endless quest to understand why humans sometimes behave in ways that would make even a theoretical physicist scratch his head. I’ll leave you with this “Everything should be made as simple as possible but not simpler.”