OPEC Out! This week’s meeting was really a bust!
By David Haggith
December 3, 2016
In May, I wrote an article titled “The OPEC Epoch is Over,” which pronounced OPEC officially dead and predicted oil prices would plunge again. So far, I’ve been wrong about a second perilous plunge in oil prices. However, even as market heavyweights herald this week’s OPEC meeting for pumping up oil prices, a few voices join this lightweight in saying this meeting proves OPEC is over.
The Financial Times says, “Oil Output-Cut Pact Spells ‘the Beginning of the End’ for OPEC.”
“The recent OPEC oil output-cut deal “will come to symbolize the passing of one of the world’s most powerful cartels,” the Financial Times predicts…. “After 50 years in control of the oil price, OPEC has submitted to the economic power of a much-changed global market. The deal represents the recognition of their own impotence by a group of countries that once held unchallenged power,” writes Nick Butler, a visiting professor and chair of the Kings Policy Institute, London. (Newsmax)
In other words, OPEC has given up on the Saudi brainstorm of flushing the US out of the oil export market. Contrary to the Saudis’ expectations, the US oil industry did not fold, though it buckled a bit. Saudi Arabia was forced to fold first.