Given the dire straits of OPEC countries’ fiscal situations, the cartel may ultimately take action at its meeting on November 30 to lift prices, a move that would hurt consumer countries. But a production cut isn't a forgone conclusion.
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.
OPEC has learned in recent months that it doesn't even have to cut production to boost oil prices.
When prices were high, OPEC members benefited from any speculative-driven rally. Now, however, the tables have turned—OPEC members, already suffering from low prices, are jittery that speculators will sell the market down again toward previous lows.
U.S. President Barack Obama travels to Saudi Arabia this week, where he will navigate a damaged relationship with an ally while trying to reorient American priorities in the region.
Even as the official talks in Doha collapsed, the discussion of a production freeze between OPEC and Russia helped raise oil prices sufficiently to eliminate the need for a formal agreement.
The OPEC freeze deal is already having the intended impact, pushing prices up by 40 percent, while also helping to establish a foundation of trust among participating oil producing countries.
OPEC's Secretary General said that the "freeze" between certain OPEC and non-OPEC producers is helping to improve prices.