With each passing day there is another indication that OPEC has struck a deal to limit production in an effort to raise the price of oil from its current mid-$40 a barrel range. Usually these announcements rest upon the Saudis, Iranians, Iraqis or other member-states wanting to keep market share while raising prices to assist their floundering economies, or war-torn countries. These are some of the factors that have caused recent attempts at limiting production to fail.
What is never taken into account are balance sheets, profit and losses, to drill or expand, and whether or not there is sufficient demand for additional barrels of oil to reach world markets. Further, no one seems to be asking what to do with
The laws of supply and demand, and international finance have taken a back seat to the whims of OPEC members who can’t agree on production limits. Even recent announcements indicate OPEC is still drilling, pumping and
Simply put, the Saudis and Iranians deep
What was lost in the agreeing document was the Iranians balking at limiting production. The Iranians were seen as holding up real production cuts after years of crippling sanctions were recently lifted after the P5+1 agreement. Without the Iranians, the upcoming OPEC meeting in Vienna will not move oil into the $60 a barrel range that countries such as the Saudi Arabia, Russia, Libya and Venezuela desperately want.
With all of these challenges, and scuttlebutt of an OPEC
A few points for investors to remember – OPEC and the fossil fuel markets – aren’t going anywhere, anytime soon. With over
By Todd Royal for Oilprice.com
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