Oil prices hovered below a three-year high last week, but the rapid run up in oil prices from below USD45 a barrel just seven months ago has lead many investors to ask if USD70 a barrel will mark the peak for the market? Learn more
Oil soared as much as 10% after OPEC approved the first supply cuts in eight years in an effort to ease a record glut and stabilise global markets, but how effective will the proposed cuts be in raising oil prices?
Whilst much was initially made of the collapse of OPEC talks with Russia over the weekend at Doha, it makes little difference to the balance of supply and demand in the global oil markets. The putative freeze in crude output was political eyewash.
Hardly any country in the OPEC cartel is capable of producing more oil. Several are failed states, or sliding into political crises.
Saudi Arabia’s hard-nosed decision to break ranks with its Gulf allies at the meeting in Doha – and with every other OPEC country – punctures any remaining illusion that there is still a regulating structure in global oil industry. It told us that the cartel no longer exists in any meaningful sense. Beyond that it was irrelevant.