Crude oil prices have had a very good increase in price because of announced crude oil production cuts of 1.2 mbd by Saudi Arabia and its fellow OPEC members and alliances, mainly Russia. Even though crude oil production in the United States has continued to steadily increase to record levels, it seems OPEC can still have significant influence on prices. I am surprised that prices have risen this much, considering the level of domestic production. What would have happened if no production cuts were made? It seems the health of this industry is teeter-tottering on the proverbial fence.
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Correct. It's all political and power/control influenced. It has little to do with the commodity itself and availability/reserves.
Qatar was a small player in OPEC oil. They are big in LNG. They took many decisions, including leaving OPEC, after being put under the thumb by the other GCC countries. It is all about their support for Iran. Nothing to do with oil.
OPEC doesn’t have the clout it once had. Sure, they still have influence, but the United States has become the game-changer in the power equation of oil futures. Add the tiny Aran state of Qatar to the diminishing power of the cartel has because it left OPEC about a month ago in December. It was the first Arab state to join OPEC after its founding in 1960 and the first one to leave the organization. We may see Kuwait do the same since it’s politics, not oil that is driving the separation with Saudi Arabia. As oil prices rise because of the news OPEC will cut production, the US fracking business will be ramping up to reap the higher per barrel prices. Forget about $100 oil or even $70. That’s gone now. We will be living in a band of $40’s to $60’s for a long time to come.
Yes good old American greed is tanking the oil industry. There is no control or constraint in shale.Thank OPEC oil isn’t at $20.