Who Knew? OPEC Actually Matters Again
Last week’s OPEC meeting produced no headlines, but it didn’t need to. Global petroleum demand is rising, and US production is falling. Only OPEC can fill the gap – suddenly, it is relevant again. Who needs a production freeze, when the post-sanction surge of Iranian production has crested, Nigeria and Venezuela are becoming more deeply impaired, and Libya and Iraq continue at risk? Oil will move higher, to as much as $65 this year. US shale producers will re-activate at that point, and inventory can cushion potential shortages in the meanwhile. But sentiment has changed – from glut to shortage.