July 2, 2018

On Monday, the Toronto Stock market was closed for the holiday and the S&P 500 ended the day up 0.3%.

Oil remains strong at U.S. $74.50 for West Texas Intermediate.

Trump is complaining that OPEC has manipulated oil prices higher than they should be. He is right on that. OPEC exists to collude and push oil prices higher than they would be if the OPEC countries actually competed aggressively for oil volume rather than agreeing to oil production quotas for each member countries. They do tend to cheat on the quotas but the overall impact is certainly to push oil prices higher.

Canadians, these days seem to view higher oil prices as a good thing. And higher oil prices are certainly good for oil companies and for the governments of Alberta and other oil producing provinces that collect higher royalties and at higher oil prices. But I would think higher oil prices are generally quite negative for Ontario, Quebec and the Maritime provinces. Trump knows that high oil prices benefit some Americans. But he seems to believe that, overall, higher oil prices are a negative for the U.S. He is probably right. Perhaps it is about time that the U.S. or some other international body put major pressure on OPEC to cease colluding and pushing up the price of oil. But OPEC is not the only international body that exists to collude and push up the price of some commodity or other, For Canada, CANPOTEX (for Potash) comes to mind. There are probably other examples as well.

Futures on Monday evening suggest a mildly negative opening for stock trading on Tuesday.


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