Publications: Notes at the Margin

CERAWeek Exposes OPEC's Permian Achilles' Heel (March 12, 2018)


OPEC's secretary general Mohammed Barkindo came to CERAWeek in Houston had dinner Monday night with shale oil producers and oil traders and Tuesday night with money managers and hedge funds. Re the latter meeting, he appeared to have two objectives. The first was to convince the large group of traders that use algorithms to trade commodities, rather than focusing on supply and demand, to leave oil alone. Barkindo probably hoped as well to convince investors and money managers to increase pressure on US producers to concentrate on returns and dividends rather than production. Friday, though, Platts' Brian Scheid wrote the epitaph for OPEC's hopes. He began brilliantly with "OPEC ministers came to Houston this week for a 'thank you' that never arrived." He then noted the secretary general's call for the industry to "salute them for their courage" and observed that "OPEC ministers got a different response."


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