Lately, I have realized that many things in life have unspoken, secret ingredients. Often, we do not even realize the role that these secret ingredients play, when in reality, they really make or break the whole deal. These secret ingredients can fly under the radar, but are absolutely crucial components.
Take my go to chocolate cake for example – a few months back, I baked it with chocolate that I had brought back from Paris, and when I opened my pantry this weekend I realized I had just enough chocolate left to make one more special chocolate cake. They say that baking takes on how you are feeling, so I often put my heart and soul into my baking, mixing love and kindness in with my ingredients – adding in my special chocolate from my first adventure in France came naturally and added depth of experience to the chocolate flavor (in my humble opinion).
However, the secret ingredient in my chocolate cake is not Parisian chocolate or love and kindness…more on that below.
What about the price of oil?
Similarly, there are many unspoken or overlooked ingredients that affect the price of oil. In fact, opinions differ on what the most important underlying factor affecting the price of oil actually is. To some extent, it can be said to be in the eye of the beholder.
Some say the rig count is an important factor affecting the price of oil, as it has historically been considered to be an indicator of production – see our previous post entitled, “Things We Rely on as a Litmus Test: The Rig Count and Hummingbird Cake.” Others say international relationships and the global economy are the unseen ingredient affecting the price of oil, while some say infrastructure and drilling efficiencies are the unspoken key, and still others say the value of the dollar is the hidden factor.
In recent months, the spotlight has been on the supply component, as OPEC production cuts were aimed at reducing the market’s oversupply issues. Many may think that the supply component is hardly a “secret” ingredient affecting the price of oil, but I disagree. Until the OPEC production cuts, many were not as focused on the critical importance of the supply factor.
According to Oil & Gas 360 article entitled, “Oil Hits One-Month High: Markets Account for North Sea Outage, OPEC Compliance,” “OPEC’s higher than expected compliance with production cuts is also helping keep prices afloat. The group’s decision to cut production helped raise crude oil prices from 12-year lows of $27 per barrel in February of 2016.”
Is supply really that crucial to oil prices?
We will likely see the answer to that question if the OPEC production cut deal is not extended. As discussed in an article featured on OilPrice.com entitled, “OPEC Deal Extension Looks Shaky as Shale Hedges Production,” originally, the OPEC production cuts deal was to last only six months – at this point, it has been in place for just over five months, “but there was always the possibility of an extension.”
So what is the secret ingredient in my chocolate cake recipe?
Like the secret to getting me out of bed in the morning, coffee is the secret ingredient. Strong, high quality, black coffee.
When strong, black coffee is mixed with melted chocolate and brought to a boil, the coffee brings out the complexity in the flavors of the chocolate. Without the coffee, the chocolate tastes simple and unremarkable in the cake, but with the addition of strong coffee, the chocolate becomes complex, elegant and deep and turns a cake into a showstopper.
Sometimes, it is the secret ingredients that are the crucial components.
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