OPEC Members Continue Non-compliance

Written by  Bob Adelmann Friday, 11 August 2017

The Paris-based International Energy Agency (IEA) noted in its latest report released on Friday that non-compliance among OPEC’s members, and those non-members who also agreed to cut oil production, increased again in July. Non-compliance is the death knell for any cartel, and OPEC is no exception.  Specifically, non-compliance among the cartel’s members rose to 25 percent in July, the highest since the agreement was inked in January. Among non-OPEC members who signed on to that agreement, non-compliance was at 33 percent in July...........OPEC has only two tools at its disposal: control of production, and words. As the cartel control of production thanks to increasing noncompliance by its members, it must rely on words. In anticipation of the report from the IEA, OPEC held a meeting with some of the non-complying members earlier in the week, calling them to task for their waywardness (“laggards” was the term used) and then ending the meeting with a press release designed to soothe the skeptics: “All [laggards] expressed their full support of the existing monitoring mechanism and their willingness to cooperate.”

This changes nothing. The reality is that the cartel’s increased fraying at the edges could threaten its very existence.......To Read More....

My Take - OPEC is doomed - good ridence - couldn't happen to a more deserving group, and fracking is the reason.  Fracking is going to change the way the world works, far more than many realize or wish.