Expert Analysis: A Long Road Ahead For OPEC

  • WTI rallied to a weekly high of $48.32 mid-day Thursday following OPEC’s announcement that it will agree to limit production to between 32.5m bpd and 33m bpd at their November meeting. While the signal of cooperation between members with dire finances and opposing involvement in violent conflicts in the Middle East and North Africa was a rightful bullish jolt to oil, the real heavy lifting of devising a plan of shared sacrifice between ideological opponents at time of extreme fiscal stress still lies ahead. By Thursday afternoon WTI’s rally had cooled somewhat with futures trading near $47.70 and the market already had a signal that cooperative cuts would be difficult to achieve as Iraqi leadership very publicly questioned the use of secondary source output estimates in determining output quotas.

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