OPEC States That Wanted Production Cuts Buckle Under the New Oil Order

June 2, 2016 Share Print 0

Saudi Arabia engineered OPEC’s policy to kill off U.S. shale oil production. The plan was straightforward: Keep pumping oil, maintain market share and outlast the Americans.

But the plan is also producing casualties within the cartel itself: Angola, Nigeria and a Venezuela that’s on the verge of implosion.

Six months after OPEC left its high-production policy in place, some of the cartel members who called loudest for output cuts are feeling the most pain. Inflation is soaring and currencies have plummeted in lesser petro states, as top exporter Saudi Arabia continues to dictate policy.

While Riyadh tries to embark on a new path toward economic diversification under its influential deputy crown prince, those other OPEC states are seeing fragile gains slip away and threats to stability creep in.

For the moment, relief is elusive.

CNBC

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Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.