Opec and oil market dynamics
Opec's goal of defending high oil prices may suit some members in the short run, but its long-term impacts could be damaging
Since its historic agreement in November 2016, Opec's efforts to manage the oil market have shown signs of success: key benchmarks are in backwardation, speculative positioning has been at record length and a floor price of $60 a barrel has been defended. Strong Opec compliance—both voluntarily (Saudi Arabia) and involuntarily (Venezuela)—has been supported by stronger-than-expected demand growth. By Opec's own measure of success, its target of reducing five-year commercial OECD inventories has been largely met (currently between 30-50m barrels above five-year average). As Opec meets in June to review its progress, it has already signalled its dissatisfaction with using the five-year average
Also in this section
21 February 2025
While large-scale planned LNG schemes in sub-Saharan Africa have faced fresh problems, FLNG projects are stepping into that space
20 February 2025
Greater social mobility means increased global demand for refined fuels and petrochemical products, with Asia leading the way in the expansion of refining capacity
19 February 2025
The EU would do well to ease its gas storage requirements to avoid heavy purchase costs this summer, with the targets having created market distortion while giving sellers a significant advantage over buyers
18 February 2025
Deliveries to China decline by around 1m b/d from move to curb crude exports to Shandong port, putting Iran under further economic pressure
