OPEC+ Risks Oil Slump Below $50

OPEC+ Risks Oil Slump Below $50
With their next meeting just weeks away, OPEC and its partners are showing no impetus for stronger action to support oil prices.

The impact of a market downturn wouldn’t be limited to OPEC. American shale production has already slowed considerably as lower prices constrain drilling, productivity slackens and investors push companies to provide returns rather than invest in output growth. Drilling could plunge by 20% if OPEC+ eschews additional cutbacks, Rats said.

The gravest fallout of inaction for OPEC however may not be financial. Having promised to keep the market in equilibrium, its reputation may suffer if the group sits back and allows a surplus to develop.

“OPEC is not any longer the market maker for oil,” said Dario Scaffardi, chief executive officer of Italian refiner Saras SpA. “I think they’re reaching their limit.”

To contact the reporter on this story:
Grant Smith in London at gsmith52@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Helen Robertson


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Stephen Archer  |  November 12, 2019
Or US Independent producers could cut THEIR production. Why must OPEC & OPEC "Friendlies" bare the burden of over production? MAGA my ***; it's a World commodity marketplace.