It may be too soon to write OPEC's obituary, but the oil producer club appears in urgent need of late-life care. It shows little understanding of where it is, how it got there or where it's going. While it still manages to collect new members here and there, its core group looks more fragile than at any point in nearly 30 years.
The historic output agreements, put together so painstakingly last year, are failing. Nearly 12 months of shuttle diplomacy culminated in two deals that would see 22 countries cut production by nearly 1.8 million barrels a day. Implementation has been better than for any previous output cut, with compliance put at 106 percent in May. A resounding success? Hardly.
We're now in the final month of those deals and oil prices are lower than when they were agreed. Not only have producers sacrificed volume, but they earn less for each barrel they do produce.
Read more ....
Update: The Oil Glut Camouflages Some Vicious Black Swans (Liam Denning, Bloomberg)
WNU Editor: As to the future .... this is not going to help OPEC .... Trump to Call for U.S. ‘Dominance’ in Global Energy Production (Jennifer A Dlouhy, Bloomberg), nor the development of other fossil resources .... Not All Fossil Fuels Are Going Extinct (Nathaniel Bullard, Bloomberg). But the real threat to OPEC is this .... One chart proves low oil can't stop the US shale oil surge (Geopolitical Futures, Mauldin Economics).
1 comment:
You would have to study economics, the dismal science, which is a combination of psychology and accounting.
If someone cannot master economics (understand human behavior), what right do they have to rule?
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