OPEC vs Central Banks: no winner yet

OPEC vs Central Banks: no winner yetWhile Saudi Arabia cuts production, central banks are taking actions that have the opposite effect on oil prices. According to OPEC estimates, a barrel of Brent oil should now cost $80, by the end of July  $90 and more than $100  in August. Alas, there is no perfect market.Demand in China is falling short, so the only way the Saudis can get the prices they want is by cutting production while the Fed and other central banks raise rates in an attempt to curb inflation.But no one has cancelled the positive correlation between the demand for oil and economic growth: the rise in oil prices leads precisely to the acceleration of inflation. And who will win this race of interests?OPEC believes that the unexpected rise in US employment is due to companies spending on hiring new employees the balance of money received in the form of excess, irrational assistance during the COVID pandemic.The cartel could well get a price of $80 or even $90 a barrel if oil supplies are disrupted in one region or another, or if oil demand, which is usually higher in summer than in other periods, increases sharply. Such situations can even be deliberately provoked.If that happens, inflation will encourage the Fed and ECB to further tighten monetary policy and any oil rally will quickly come to a halt.If the Saudis think they are better off selling less oil at higher prices, how many consumers would be willing to pay, say, $100 a barrel? There may not be many of them. No matter how elastic the oil demand is, consumer incomes are growing slowly, and the pain threshold in terms of inflation is limited.OPEC forgets that the shale industry today is Exxon Mobil Corp (NYSE: XOM), Chevron Corp (NYSE: CVX) and other major players who are no longer afraid of price cuts. So creating a new oil crisis will be very difficult.What do you think, which of the prices is more likely  $40 or $100?Profits to yall!#ForexChief #opec #CentralBanks #forexnews #stocks #worldnews #Market #ecb