OIES – Energy Quantamentals: A Tale of Two Algorithms and OPEC+, Jun

The document discusses the impact of algorithmic trading on oil prices, especially in conditions where fundamental factors such as supply and demand are balanced.

The report examines two main algorithms: one buys oil as a hedge against inflation and geopolitical risks, while the other sells oil futures as a portfolio insurance against global recession risks. As a result, the oil market becomes more sensitive to the actions of traders and their algorithms, which may support the decisions of some OPEC+ countries to increase oil production.