This article from Downstream Today really caught my eye;
Guess what? According to OPEC;
“A persistent surplus could weigh on prices, which have collapsed to a 12-year low of $27.10 a barrel last month from over $100 in mid-2014. OPEC’s 2014 strategy shift to defend market share and not prices helped deepen the decline.”
Really? I’d never have guessed. They go on;
“It seems that the overall negative effect from the sharp decline in oil prices since mid-2014 has outweighed benefits in the short-term,” OPEC said.
You don’t say . . . who would have thought that slashing oil company profits would halt trillions of pounds of investment by . . . oil companies. And that massive cuts in profits would drive down the share prices and value of stock held by . . . investors in oil companies . . . such that they won’t back new investment.
“There seems to be a ‘contagious’ effect taking place across many aspects of the global economy.”
OK, now you get it, so what’s the plan (my emphasis) . . .
“The monthly report from OPEC indicates supply will exceed demand by 720,000 barrels per day (bpd) in 2016, up from 530,000 bpd implied in the previous report.”
“Top OPEC exporter Saudi Arabia told OPEC it increased production to 10.23 million bpd from 10.14 million bpd in December. The secondary sources also reported higher output from major producers Iran and Iraq. Supply from OPEC could rise further due to the lifting of sanctions on Iran. Tehran is aiming to increase output by 500,000 bpd, which would fill most of the hole left by non-OPEC members.”
To paraphrase Cat from Red Dwarf;
“That’s your plan? Nice plan. Shall I paint a bullseye on my face?”