While there is a long list of potential factors that could surprise the market in 2019, OPEC+ supply curbs create a tightening baseline that should lead to higher oil prices as the year wears on.
Despite a range of uncertainties looming over the oil market this year, there is a growing sense that OPEC+ might be able to succeed in balancing the market after all.
There may come a day when the U.S. is able to claim that OPEC is finally broken, but that day has yet to arrive.
Washington needs to give further examination to its long run strategy regarding OPEC, which should include continuing policies supporting U.S. makers of electric cars.
Responding to a looming period of oversupply, OPEC and its non-OPEC allies agreed to cut production through the first half of 2018 of 1.2 million barrels per day.
If it occurs, the production cut would be a dramatic about-face compared to six months ago, when Saudi Arabia and Russia signaled their intention to lift output to ensure the oil market did not overly tighten.
When Saudi Arabia threatens to weaponize its oil production, the U.S. cannot afford to brush off this warning by overestimating the potential of shale to cover the shortfalls.
Saudi Arabia's veiled threat to leverage its oil production, in response to widespread outrage over the fate of Jamal Khashoggi, serves as a reminder of the kingdom's power over the global economy.
Rapidly declining oil exports from Iran, combined with ongoing losses from Venezuela, could put Saudi Arabia’s spare capacity to the test.
The United States spends at least $81 billion every year protecting the global free flow of oil.