In the midst of a week of bad to terrible news for oil prices, OPEC tried to alleviate concerns that its meeting this November will, in fact, produce a meaningful deal on production cuts.
“We remain deeply optimistic about the possibility that the Algiers agreement will be complemented by precise, decisive action among all producers,” announced OPEC via its regular publication, “OPEC Bulletin.” The announcement came as industry analysts and pundits criticized the organization, casting doubt on its ability to deliver a deal on a production freeze. OPEC was also very visibly lashing out at critics who have criticized its ability to influence markets in a substantive way.
The September announcement helped push prices past $50 for over a week, before they plunged back down to $44 this week. The decline was largely attributed to massive inventory build reports from the EIA and API. The zig-zagging of prices mirrors a similar trend from last April, when an anticipated OPEC freeze deal at Doha helped send prices up before disagreements between Saudi Arabia and Iran caused Riyadh to scupper the deal, leaving markets to tumble.
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WNU Editor: The development and the constant improvement on technologies that do oil and gas fracking have revolutionised energy production .... and that trend shows no signs of ending. In this context .... there is now a floor price for oil, and that floor is anywhere between $40 to $50 a barrel. Above that .... the companies involved in fracking for energy will only increase their production rigs .... because they are making money at those prices. For OPEC and non-OPEC countries like Russia .... dependent on high oil prices that they could always control in the past by limiting their production .... those days of power and influence are definitely gone.
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