OPEC Betting on Energy Rivals to Blink

The Organization of Petroleum-Exporting Countries (OPEC) reduced its forecasts for non-OPEC oil supply growth in 2015 on Thursday, indicating that its apparent strategy of putting pressure on its American rivals could be working.

In its monthly report, published Thursday, the group of 12 oil-producing nations also said demand for the oil it produced would be higher than previously thought, at 29.3 million barrels per day (mb/d).

OPEC – which includes Saudi Arabia, Iran, Libya, Nigeria and Venezuela and others as members — has become well known over the last year for its refusal to reduce production, despite tumbling global oil prices amid a glut in supply.

The price of benchmark Brent crude oil has fallen from a high of $114 a barrel in June last year to trade around $62.30, but OPEC has been seemingly content to watch the price fall without cutting production in a bid to support prices.

The move has been widely seen as an attempt by the old guard of oil producers to put pressure on the new era of shale oil producers in the U.S. and Canada – where production costs are higher.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza