In another (to quote the most overused word in the English language) “unexpected” move, OPEC today in a meeting in Vienna has failed to agree on an increase in production in spite of oil prices staying above $100.00 per barrel. This despite Saudi Arabia’s push to increase production in order to keep price low enough as to not damage the global economy. (OPEC controls 40% of global supplies)
Why was this unexpected? This move signals the first time since 1998 that Saudi Arabia, the largest oil produced in OPEC, no longer has de facto control over the cartel’s direction, and oil consuming countries can no longer rely on OPEC to follow Saudi Arabia’s price-moderating influence. Further politics and domestic economic factors now play a major role in the decision making process as the majority of cartel members now see crude oil prices significantly above $100.00 as a floor not a ceiling.
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