The Future Of OPEC And Oil Prices

JWN Energy Group’s Daily Oil Bulletin
26 February 2018

The Organization of the Oil Exporting Countries (OPEC) was born in a time of plenty, prospered over a period of real or perceived scarcity, and will likely die in the distant future as the world shifts away from high-carbon energy resources. In the interim, OPEC, and its newfound non-OPEC friends — especially Russia — will have their work cut out for them. They should have the wherewithal to keep crude oil prices at a fairly high level until the U.S. light tight oil (LTO) revolution meets a significant slowdown in global oil consumption growth in the first half of next decade, but as the LTO revolution spreads beyond the U.S. and oil consumption plateaus and then declines “OPEC Plus” will be forced to gradually ratchet down their target price until it is no longer economically worthwhile to control oil supply.

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