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ETF TRADING RESEARCH
OPEC Oil Prices Hit
Energy ETFs
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Hi, My name is Corey and I‘m with ETF
Trading Research, today were reviewing
our recently published article…
OPEC Oil Prices Hit Energy ETFs
Last week, the members of Organization
of Petroleum Exporting Countries or
OPEC met. They decided to continue
pumping oil at a record pace and let
OPEC oil prices fall as the supply glut
widens.
The immediate reaction to the decision
had a negative impact on oil prices. The
price of a barrel of WTIC crude oil
plunged 5% to the lowest levels since
2009.
As a result, analysts are slashing
earnings and valuations of oil and gas
companies. And oil and energy ETFs that
hold these assets are being taken down
as well.
Why Does OPEC Want Lower Oil Prices?
OPEC’s decision to continue flooding the
global market with more oil than it needs
wasn’t unanimous. Many countries want
the cartel to cut back production to
support oil prices.
But the kingpin of the cartel, Saudi
Arabia, wants to protect their market
share from surging oil production in the
US, Iraq, and Russia.
In short, they hope that keeping oil prices
low will curb oil production from non-
OPEC oil producers. Once they have
forced these producers out of business
or at least force them to halt expansion,
then OPEC won’t need to cut back their
production as much to support higher oil
prices. In short, this is a high stakes
game of chicken… and they’re betting
that they can outlast their upstart
competition from US shale oil and other
oil producers.
Impact of OPEC Oil Prices and US Oil
Production
Low oil prices are having a big impact on
US shale oil producers. Many smaller
US oil and gas companies have already
missed bond payments or been forced
into bankruptcy.
According to the former head of oil firm
EOG Resources, Mark Papa, "We are
about to see a pretty dramatic decline in
U.S. production growth." US oil
production has peaked. It’s expected to
fall from 9.6 mbpd to 8.6 mbpd in 2016.
Needless to say, a decrease in US oil
production will be a major headwind
towards the US achieving energy
independence.
Who Benefits The Most From Lower
OPEC Oil Prices?
In the long run, the big winner from the
price war will be major oil and gas
companies.
Companies like Exxon Mobil (XOM) and
Chevron (CVX) have the resources and
financial stability to withstand a price war
with OPEC unlike the smaller US oil
producers.
What’s more, many of these companies
missed the boat on the initial wave of US
shale oil production. As small companies
falter the big boys will be there to pick up
the pieces for pennies on the dollar.
Get started with you Oil ETF research.
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OPEC Oil Prices Hit Energy ETFs

  • 1. ETF TRADING RESEARCH OPEC Oil Prices Hit Energy ETFs
  • 2. Welcome to ETF Trading Research Your premier site to instantly diversify your portfolio to make more money! Want More Research and Strategies on ETFs visit our website ETFtradingresearch.com
  • 3. Hi, My name is Corey and I‘m with ETF Trading Research, today were reviewing our recently published article…
  • 4. OPEC Oil Prices Hit Energy ETFs
  • 5. Last week, the members of Organization of Petroleum Exporting Countries or OPEC met. They decided to continue pumping oil at a record pace and let OPEC oil prices fall as the supply glut widens.
  • 6. The immediate reaction to the decision had a negative impact on oil prices. The price of a barrel of WTIC crude oil plunged 5% to the lowest levels since 2009.
  • 7.
  • 8. As a result, analysts are slashing earnings and valuations of oil and gas companies. And oil and energy ETFs that hold these assets are being taken down as well.
  • 9. Why Does OPEC Want Lower Oil Prices?
  • 10. OPEC’s decision to continue flooding the global market with more oil than it needs wasn’t unanimous. Many countries want the cartel to cut back production to support oil prices.
  • 11. But the kingpin of the cartel, Saudi Arabia, wants to protect their market share from surging oil production in the US, Iraq, and Russia.
  • 12. In short, they hope that keeping oil prices low will curb oil production from non- OPEC oil producers. Once they have forced these producers out of business or at least force them to halt expansion,
  • 13. then OPEC won’t need to cut back their production as much to support higher oil prices. In short, this is a high stakes game of chicken… and they’re betting that they can outlast their upstart competition from US shale oil and other oil producers.
  • 14. Impact of OPEC Oil Prices and US Oil Production
  • 15. Low oil prices are having a big impact on US shale oil producers. Many smaller US oil and gas companies have already missed bond payments or been forced into bankruptcy.
  • 16. According to the former head of oil firm EOG Resources, Mark Papa, "We are about to see a pretty dramatic decline in U.S. production growth." US oil production has peaked. It’s expected to fall from 9.6 mbpd to 8.6 mbpd in 2016.
  • 17. Needless to say, a decrease in US oil production will be a major headwind towards the US achieving energy independence.
  • 18. Who Benefits The Most From Lower OPEC Oil Prices?
  • 19. In the long run, the big winner from the price war will be major oil and gas companies.
  • 20. Companies like Exxon Mobil (XOM) and Chevron (CVX) have the resources and financial stability to withstand a price war with OPEC unlike the smaller US oil producers.
  • 21. What’s more, many of these companies missed the boat on the initial wave of US shale oil production. As small companies falter the big boys will be there to pick up the pieces for pennies on the dollar. Get started with you Oil ETF research.
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