OPEC just concluded its semi-annual conference. In the brave, bold manner that you might expect from such an organization, they “kicked the can down the road”. Their inability or unwillingness to decide on anything is really no surprise since each individual member held firmly to his historical position. Each member insists of the others, “You cut!” Of course, no member accepts that call for sacrifice.
In the press conference following the official reading of the communique, the President of the Conference and the Secretary General added a new element to their position. They borrowed from the standard position of each member, “You cut”, and applied it on a worldwide basis. They now are calling for all non-OPEC members to cut. Further, they have promised that when the rest of the world falls into line with their wishes, then they will relent on their stubbornness and also participate in the cut, with the implied caveat that they must make room for Iran, Iraq and anyone else in OPEC who “needs” income.
Can’t you visualize it now? Each producing country of the world, Canada, the US, etc., will now send delegates to Vienna to negotiate their offer of a cut. Even if this occurred, the results of the negotiations would have no mechanism for insuring compliance. Much like the OPEC quotas of the past.
OPEC has learned a lot in its 50-year existence. Not!
Futures will continue to fluctuate!!!