OPEC's Difficult DecadeReported by Forbes.com on Sunday, 13 May 2012 (on May 13, 2012)
OPEC got some great news lately, Chinese growth is cooling to a ‘cow like’ 8.2% rather than the bullish 8.5% analysts had previously expected for 2012. For oil fundamentals that’s pretty important: Brent has dropped to $112/b. Confused? Don’t be. OPEC would normally be more than happy to maximise receipts to keep prices as high as possible, but even its most vocal members were getting worried they were pushing their luck this time. Prices reached nominal euro / sterling highs in March, and it was hardly a well-kept secret on the trading floors of London that the Saudis had lost control of the market. Riyadh was maxed out, Iranian sanctions were biting, broader OPEC production was slipping. Traders were sticking whatever they could into storage; even the IEA was being brought in to quell market sentiment by threatening a release of stocks. Unless OPEC wanted a 2008 re-run when the oil bubble spectacularly burst, things clearly needed to calm down.
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