It can’t be much fun to be Saudi right now. Everyday, talking up the idea that OPEC can and will put the oil market ‘in balance’ (thats price fixer talk for under our control) and then reading how your fellow OPEC members are cheating on their quotas and how resilient shale oil in the US actually is. Day after day, I visit Reuters and read the two sets of competing stories – oil is rebalancing according to Saudi Arabia on the one hand and ‘oil prices weaken on increase in stocks’ on the other. The USD is weakening too making the impact on producer countries even worse unless they are doing some currency hedging. The market is truly a supply – demand market right now and neither speculation nor price fixing by cartels is going to have an impact this year and maybe well into next. Oil is one of the worst performing commodities for 2017 to date.
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