By: Quincy Krosby, PhD, Chief Global Strategist & Joshua Cline, Analyst
Despite a heavy lobbying effort to cajole OPEC+ members to agree to a unified cut in oil production, Saudi Arabia, the de facto leader of the energy cartel, was unable to orchestrate anything more than pledges on a “voluntary” basis. Accordingly, benchmark oil prices continued to slide lower following the announcement, and without a catalyst to propel prices higher, oversupply in the market coupled with concerns over the global economic landscape, have steadfastly kept prices lower.
Nonetheless, forward pricing forecasts indicate prices will climb higher. The role of the Saudis as the OPEC+ leader has been questioned regarding how ineffective they’ve been in organizing a viable response to softening prices. The broader issue for the cartel is whether the current structure is flexible enough to accommodate the disparate economic needs of its constituents, especially in a challenging economic environment.
Read the full commentary here: weekly-market-commentary-12.11.2023