Publications: Notes at the Margin

OPEC's Start (December 1, 2014)


The leading Middle Eastern oil-exporting countries, the group we have labeled the Troika (Saudi Arabia, Kuwait, and UAE), signaled markets last week by declaring they would not cut production to balance the market and thereby enable high-cost frackers, tar sands producers, and companies investing in the Arctic to freeload. OPEC’s non-action last week is probably only a first step. It will take several years of current price levels or, alternatively, a shorter period of much lower prices to restore the organization’s supremacy. This week's report discusses the outlook and the implications.


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