Jeff Currie on OPEC Supply, Peak Oil Trade, and US Production Outlook

OPEC Supply and Market Surprises

• 💡 OPEC+ is reportedly discussing an output hike for July, but actual OPEC exports have decreased despite quota increases.
• ⚠️ The anticipated market surplus has not materialized, and the market continues to drift higher, contrary to bearish rhetoric.
• 📈 Oil prices, currently around $65, are expected to move back towards pre-liberation day levels of $75.

The Concept of 'Peak Oil Trade'

• 🎯 The idea of 'peak oil' has evolved from running out of oil to peak demand (due to climate change) and now to 'peak trade', referring to constrained tradable oil.
• 🇨🇳 China's stable oil consumption around 12 million barrels per day indicates a likely peak in its oil trade, though demand from India is still growing.
• 🌍 Restrictions on oil consumption for security reasons in countries like China are expected to remain high.

US Production and Investment Landscape

• 📉 US drilling activity is at lows, with companies like Diamondback cutting capex, indicating a slowdown in production growth.
• 📊 US production, currently around 13.3 million barrels per day, shows limited ability to significantly exceed 13 million barrels per day in the long term.
• ⚠️ Low inventories, strong demand, and reduced drilling activity point to an upside risk in the oil market, which is currently short.
• 🚫 The speaker advises caution against joining a potential bear market party prematurely, suggesting waiting for clear signals.