Publications: Notes at the Margin

Understanding the Oil Producers: Market Management Tool (August 11, 2014)


Those who follow oil markets recognize that OPEC volume changes influence oil price direction. A very few people, all of whom probably work or have worked directly or indirectly for Saudi Aramco or the Saudi petroleum ministry, thoroughly understand the system. A few others who have watched the program develop sort of comprehend it. Most observers, though, assume or state that oil prices are determined by OPEC’s capacity utilization. This explanation mischaracterizes how the system works. Our report this week explains how and why.


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