In this report: C.O.T in depth analysis, What are the institutional traders doing, Trade charts, Steel tariffs to nuke Permian drilling costs, OPEC hike 411bpd for July.
Monthly book recommendation: ‘Oil’- (There will be blood) by Upton Sinclair. The book the movie was based on.
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OPEC just opened the taps again — and this time, it’s not about price, it’s about power.”
OPEC+ announced on May 31, 2025, a production increase of 411,000 barrels per day (bpd) for July, marking the third consecutive monthly hike as part of a strategy to unwind the 2.2 million bpd voluntary cuts initiated in 2022. I have no doubt this will bring in a BONE SHAKING drop in oil prices through the rest of 2025 as there is NO certainty they will stop at this. What is gained?
Squeeze marginal producers in North America by forcing prices below their breakevens. $41 in The Permian Basin. See ‘Dower Dallas’ for more.
Appease Donald Trumps desire for lower oil-at the cost of U.S. oil industry jobs.
Teach Kazakhstan a lesson for over producing above provided quotas.
There is no bullish thesis. Front price wise, the most bullish thing that could happen is that we have a fast flush out to the downside, which would cause mean reversion up higher to the current average price on WTI $67s. I do not see this happening.
See below for trade thesis and price movements I would get involved in.
Articles
Trump says he plans to double steel, aluminium tariffs to 50%
Video: How Gulf Oil Giants Are Buying Global Power
Chevron to Cut 800 Jobs in the Permian
Inventory data
We are seeing global levels are rising. One would be forgiven for thinking that China was getting ready for something big-given the storage builds. Thanks to Vortexa for the charts.
