Goldman's Currie: Higher Likelihood of an OPEC Agreement

The transcript discusses the potential for an agreement to cut oil production among OPEC members, particularly Saudi Arabia and Russia, and the challenges of adherence to such agreements. It explores the impact of shale production on market dynamics, highlighting the short window of opportunity for price increases. The discussion also covers the incentives for countries like Libya and Iraq to increase production and the risks of cheating. Saudi Arabia's seasonal production adjustments and strategic considerations are examined, along with the role of hedging in shale production.

What has increased the probability of an agreement to cut oil production?

• An increase in shale production

• A new OPEC policy on production

• A decrease in global oil demand

• The willingness of Saudi Arabia and Russia to participate

What is a potential consequence of higher oil prices due to production cuts?

• Increased drilling activity by shale producers

• A decrease in global oil demand

• A reduction in OPEC's market share

• A rise in renewable energy investments

What is a risk of failing to raise oil prices after production cuts?

• Strengthening of the US dollar

• Higher renewable energy investments

• Increased global oil demand

• Draining of liquidity and reserves

Why might some OPEC members be incentivized to increase production before a deal?

• To negotiate a higher production base

• To reduce global oil prices

• To support renewable energy initiatives

• To comply with international regulations

How does Saudi Arabia's seasonal production affect their ability to claim a production cut?

• They have no seasonal production changes

• They rely on imports to meet demand

• Their production increases due to higher demand

• Their production naturally decreases in cooler months

What historical context is provided for compliance with production agreements?

• Compliance is higher during economic booms

• Compliance is always high regardless of the economy

• Compliance is higher during recessionary periods

• Compliance is unrelated to economic conditions

When is it expected to know if production agreements are being adhered to?

• By the end of the second quarter of next year

• Immediately after the agreement is signed

• At the start of the next fiscal year

• After the first month of implementation