GS thinks oil is grossly oversold - Nov 26

[dan_s]

"Given the size of dislocations in commodity pricing relative to fundamentals with oil now having joined metals in pricing below cost support, we believe commodities offer an extremely attractive entry point for longs in oil, gold and base metals." Analysts at Goldman Sachs said in a research report published Monday.

https://www.cnbc.com/2018/11/26/goldman ... ctive.html

[ChuckGeb]

I would assume that Goldman Sachs has pretty good insight into the expected Saudi action ahead of the 12/6 OPEC meeting. I don’t think they would make this statement unless they were confident that production will be cut.

[dan_s]

I will be stunned if OPEC+ does not agree to a significant production cut. Think of it this way, by cutting production their revenues go up. Why doesn't that make sense? Actually, 2/3rd of the cartel members can't or won't cut. Only Saudi Arabia and a few of their Persian Gulf friends will cut. It would be wise for Russia to cut as well.

[ChuckGeb]

It wouldn’t surprise me if they deferred decision on cuts to Q1 of 2019 after US producers have established drilling budgets at lower prices.