More and more market watchers are making the case that OPEC should just leave well enough alone and let the free market set the price. While trying to influence sentiment and fundamentals, on nearly a daily basis, OPEC has already destabilized the market and guarantees more uncertainty ahead.
Although the world is still in the midst of a seemingly perpetual glut, does a supply gap loom? Is peak oil demand imminent? Why is OPEC praising shale and meeting with hedge funds?
The intense levels of collusion on a global scale between politicians of producer states, OPEC representatives, and even traders are a clear reminder that the cartel's operations undermine a fair, free, and transparent oil market. OPEC argues that its decision last week was in the interests of price stability, but others see the exact opposite.
OPEC agrees to its first production cut in eight years, reminding the market of its enormous power, but the ultimate impact of the cartel's action is far from certain.
Oil markets and analysts have been skeptical that a deal would emerge from this week’s OPEC meeting, following stonewalling from ministers and signals of willingness to walk away without a deal from Saudi Arabia. But cartel members struck an optimistic tone that a deal will be achieved today in Vienna, sending oil prices up by 6 percent.
Lack of details announced alongside the new production cap reveals that many internal fissures persist. Those fissures didn't stop oil prices from rallying nearly 6 percent after the announcement.
In a rare increase in stringency over the proposed rules, certain large trucks are required to be up to 25 percent more fuel efficient.
Matt Smith is Director of Commodity Research at ClipperData, a company that tracks global cargo flows of crude and products. He speaks to The Fuse about data transparency, trade flows, and recent price trends.
A number of traders have come together under the hashtag #OOTT, the Organization of Oil Trading Tweeters, to share oil news, events, and a public data set of tanker traffic and global oil trade flows that rivals some of the best proprietary market analytics.
In an expected outcome, the latest OPEC meeting did not result in a new official production target.
“The market is doing quite well by itself and we will be very gentle in our approach so we do not shock the market. Our concern is for the long-term stability of the market,” said Saudi Energy Minister Khalid Al-Falih. “We don’t want oil shocks in any way. In the long term, we want to encourage investment.”
Cheap debt—the instrument that enabled the tight oil boom to take place to begin with—is now its greatest vulnerability. An expert panel discussed the various financial instruments being used to manage and restructure the long shadow of debt over the industry.
At the Independent Petroleum Association of America's investment symposium, a small number of well-positioned companies are explain how they have survived the price downturn, and express significant optimism for what's to come.
As "invisible barrels" come offline, there will be a lag between when oil production is shuttered and the market reacts to the removal of those barrels.
Saudi Oil Minister Ali Naimi said that there is no use in taking coordinated action with other OPEC producers to cut output, citing trust issues in the cartel.
Given the gridlock in Congress, the state of the economy, and the challenges faced by the domestic oil industry, the proposal fails to meaningfully advance solutions to move the country away from oil.