OPEC bites the bullet

Events have moved quickly in oil markets in recent days. Last week, when oil was at $80/bbl, the blog argued that OPEC risked having to defend a $50/bbl price, by delaying production cuts until its 18 November meeting. Last night, OPEC signalled it agreed with this analysis, announcing that the meeting would now take place next Friday.
The blog has established a good record on oil price forecasts. And this seems to be another success. By last night, Brent had already fallen to $66/bbl, half-way to the blog’s $50/bbl. And OPEC clearly felt it couldn’t take the risk of further falls over the next month. Instead, as the blog noted on Wednesday, it will have to take the political risk of announcing production cuts just before the US Presidential election.

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