TOPIC OF THE DAY :-“A) Changing Trends?: On The Global Petroleum Market
A Meeting Of OPEC And Its Allies In December Will Decide The Future Course Of Oil Prices
The fickle nature of the global petroleum market has been on display over the last few days as prices reacted to statements and counter-statements by producers and consumers. Over the weekend, Saudi Arabia signalled its discomfort with the falling prices and hinted at a fresh cut of one million barrels a day. The benchmark Brent crude, which slipped below the $70 a barrel mark last Friday, reacted sharply on Monday, rising to above $72. That prompted a tweet from U.S. President Donald Trump asking for lower prices, and so, on Tuesday prices again fell to below $69! The price of Brent crude, which had risen over the $85 mark in early October, is down by about 20% from its October peak. Interestingly, Saudi Arabia’s latest call to cut output comes just months after the OPEC cartel decided to increase its output. In their June meeting, OPEC members decided to ramp up supply after apprehensions over Iranian supplies in the wake of economic sanctions imposed by the U.S. Since then, the U.S. has granted a temporary waiver to eight countries, including major buyers India and China, to continue importing oil from Iran for at least the next six months. The way prices have responded to OPEC’s output decision, however, suggests that it may still be too early to dream about higher prices in the near future. A crucial meeting between the cartel and its allies in the first week of December will decide the 2019 output level. That might well set the trend for oil prices in the new year.
Even after OPEC’s sudden change in its supply outlook, oil surprisingly continued its longest losing streak on record, perhaps owing to expectations that the production cut would not raise prices significantly. In fact, technically speaking the oil market is yet to break its short-term downtrend that began after the fall from its peak in October. Oil prices were down on Tuesday as well. This price action suggests that markets could probably still be worried about the risks of any kind of sustained rise in oil prices. For one, strong U.S. opposition to higher oil prices could be making investors feel jittery. Mr. Trump’s tweet on Monday, for instance, negated the bullish influence of OPEC’s announcement almost immediately. The increasing output of shale is another significant threat to oil prices.The U.S. Energy Information Administration last week predicted that American crude output would increase at a higher pace than expected and lead to lower prices next year. This is not at all surprising because U.S. shale producers have traditionally increased their output in response to higher oil prices. Also, producers like Russia have been non-committal on any significant production cut. Any slowdown in global economic growth is another risk factor that may weigh down oil.
MEANINGS AND WORDS
1) fickle
Meaning : changing frequently, especially as regards one’s loyalties or affections.(adj)
Synonyms : capricious
Antonyms : constant
Example : “celebs trying to appeal to an increasingly fickle public”
2) prompted
Meaning : (of an event or fact) cause or bring about (an action or feeling).(v)
Synonyms : arouse
Antonyms : calm
Example : “the violence prompted a wave of refugees to flee the country”
3) cartel
Meaning : an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.(n)
Synonyms : consortium
Example : “the Colombian drug cartels”
4) ramp
Meaning : increase the level or amount of (something) sharply.(v)
Synonyms : access
Antonyms : hazard
Example : “the company has moved into new quarters in order to ramp up production”
5) imposed
Meaning : force (an unwelcome decision or ruling) on someone(v).
Synonyms : levied
Antonyms : optional
Example : “the decision was theirs and was not imposed on them by others”
6) waiver
Meaning : an act or instance of waiving a right or claim(n).
Synonyms : renunciation
Antonyms : accept
Example : “their acquiescence could amount to a waiver”
7) streak
Meaning : cover (a surface) with streaks(v).
Synonyms : quality
Antonyms : barrel
Example : “tears streaking her face, Cynthia looked up”
8) sustained
Meaning : continuing for an extended period or without interruption(adj).
Synonyms : persistent
Antonyms : destroyed
Example : “several years of sustained economic growth”
9) negated
Meaning : make ineffective; nullify.(v)
Synonyms : denied
Antonyms : good
Example : “alcohol negates the effects of the drug”
10) jittery
Meaning : nervous or unable to relax(adj).
Synonyms : nervous
Antonyms : confident
Example : “caffeine makes me jittery”
11) bullish
Meaning : aggressively confident and self-assertive.(adj)
Synonyms : optimistic
Antonyms : pessimistic
Example : “he has campaigned courageously despite difficulties that would have stopped many more bullish men”
12) prolonged
Meaning : continuing for a long time or longer than usual; lengthy.(adj)
Synonyms : extended
Antonyms : brief
Example : “the region suffered a prolonged drought”
13) pace
Meaning : a single step taken when walking or running.(n)
Synonyms : step
Antonyms : stay
Example : “Kirov stepped back a pace”
