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Gadfly's Liam Denning: Disney Movies Are More Exciting Than OPEC Meetings

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Gadfly's Liam Denning: Disney Movies Are More Exciting Than OPEC Meetings

Investors across the world are going to be paying particularly close attention to OPEC's May 25 meeting for further signs members and non-members will expand an agreement to cut supplies through the bottom half of 2017.

But investors should perhaps not stress themselves looking for the latest updates as the writing is already on the wall.

According to Gadfly's Liam Denning, Walt Disney Co (NYSE: DIS)'s movies are more suspenseful than the upcoming OPEC meeting since OPEC has no choice but to maintain its agreement to lower oil supply for several obvious reasons.

First, the U.S. Energy Information Administration released last week its updated estimates for oil supply and demand in February. The number showed that supply of oil rose 193,000 barrels a day, up from the initial estimate of 180,000 barrels a day of supply. Adding fuel to the fire, Baker Hughes weekly rig-count data showed that the number of rigs drilling for oil in the United States rose for the 15th consecutive weeks.

In other words, production of oil in the United States is clearly rising. But while this is happening, demand for oil is falling, as evidence by a reduction of 218,000 barrels of gasoline a day consumed throughout February compared to the same month a year ago.

Bottom line, OPEC has little choice but to expand its agreement, but at the same time, the effects are uncertain since Libya, an OPEC member that is exempt from the agreement, is now producing more than 700,000 barrels a day of oil. In fact, Libya could be on track to match its 1.6 million barrels a day output prior to the civil war starting.

Related Links:

Don't Expect Oil To Trade North Of $60 In 2017

OPEC Oil May Be No Match For American Ingenuity
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Image Credit: Snow White 1937, Public Domain, via Wikimedia Commons

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