• 4 minutes Why Trump will win the wall fight
  • 7 minutes Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 4 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 17 hours Ayn Rand Was Right
  • 1 day is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 9 hours Oil imports by countries
  • 15 hours Solar and Wind Will Not "Save" the Climate
  • 18 hours Sanctions or Support: Despite Sanctions, Iran's Oil Exports Rise In Early 2019
  • 15 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 7 hours North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 7 hours America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
  • 9 hours AI Will Eliminate Call Center Jobs
  • 13 hours NZ Oil, Gas Ban Could Cost $30 Bln
  • 3 hours US-backed coup in Venezuela not so smooth
Alt Text

Why WTI Is A Global Oil Market Benchmark

As U.S. crude oil production…

Alt Text

Flurry Of Bullish News Boosts Oil Prices

Oil prices reached 2019 highs…

Alt Text

The Biggest Problem Behind The U.S. Shale Boom

U.S. shale production is set…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.

More Info

Trending Discussions

OPEC Remains Positive On Output Cut As Oil Crashes To $44

With markets rattled and oil prices tanking after being bombarded on a variety of fronts, OPEC has attempted to bring some calm to the market regarding its optimism that it will be able to reach some kind of a deal. But will the market buy it?

Oil prices this week took a tumble on the back of several pieces of bearish news, including Iraq’s and Iran’s publicly shared resistance to any deal, an unfavorable API report that said the U.S. saw a build of 9.3 million barrels of crude, and then the death blow, with the EIA on Wednesday reporting a 14.4 million barrel inventory build. For perspective, we’ve not seen a build of that size in over three decades.

We all know this excess inventory isn’t just going to evaporate overnight. And the facts are that OPEC and Russia are producing oil and record levels, all the while holding meeting after meeting to discuss the prospect of “stabilizing the market”.

This week, at least, with three punches to the gut, the market’s hope is waning, and analysts are growing increasingly skeptical that a deal will ever be reached and are doubtful that the global glut will diminish anytime soon.

Accordingly, crude oil prices are down about 8 percent this week alone—a drop that probably has many an oil-dependent nation shaking in their boots.

OPEC’s response to this week’s poor oil-price showing was fairly predictable: Calm the market with words. Assure the market that a deal is still doable (despite the fact that I could rattle off at least four OPEC members who are beyond reluctant to participate, including Iraq, Iran, Libya, and Nigeria). Tell all the deal critics and oil and market analysts that they’ve got it all wrong, despite OPEC’s historical propensity for ignoring production quotas.

Thursday’s statement, which is included in the monthly OPEC Bulletin, goes like this: “We remain deeply optimistic about the possibility that the Algiers agreement will be complemented by precise, decisive action among all producers.” Related: Nigeria Requires Constitutional Revisions To Stop Oil Attacks

It’s important to view the statement carefully, noting the strategic mix of noncommittal terms (“possibility of”, “complemented by”) and specific terms (“Algiers agreement”, “decisive action”, “all producers”). The market knows that all producers won’t be cutting production. Perhaps the market will be wooed by the fact that OPEC is “optimistic” that the precise and decisive actions taken by all producers, whatever those may be, will complement the near detail-less Algiers agreement, which pledged to curb (by unnamed countries) oil production to the tune of a couple percent—a cut that would likely happen anyway this time of year, following a seasonal reduction in demand.

OPEC went further in its statement, chastising “industry observers” who have been “too harsh to criticize the organization or its member countries.” “Over the years, we have seen how wildly inaccurate their predictions have been. What many of them have failed to recognize is that OPEC’s great strength is its global reach and its diversity.”

Despite this “global reach”, OPEC also took this time at open mic night to point out that it is responsible only for 40 percent of the world’s oil production, and that the “lion’s share” of the global oil output comes from non-OPEC sources.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News