Publications: Notes at the Margin

OPEC Needs to Embrace Contango (May 29, 2017)


The "Naimi Protocol" for reducing inventory overhangs introduced in 1999 no longer works. The Naimi Protocol calls for producers to reduce production below expected consumption levels until surplus inventories are exhausted. The goal is to force stocks down to where the market moves into backwardation. The protocol worked very well in 1999, and OPEC decided to employ it again over the last six months. However, this time it has failed. This issue of Notes at the Margin provides the details and describes a new protocol for the "Vienna Group" that might succeed in boosting prices.


To request subscription information for Notes at the Margin, please Contact Us or send us an Information Request.