12/12/2012
OPEC MEETINGS
Crude Oil may Fluctuate:
“What if they held an OPEC meeting and nobody came?” asked Phil Flynn, senior market analyst at Price Futures Group. “Really, OPEC seems to be an afterthought by traders who used to buy and sell on their every word. It is unlikely that OPEC is in a position to do anything of significance.”
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But OPEC members will have to consider the many supply and demand factors in play for the oil markets that have been driving price volatility.
Tensions in the oil-rich Middle East, the U.S. fiscal cliff of spending cuts and tax hikes set for the start of the year, and euro-zone debt woes are big factors for the economy and oil-demand prospects.
The OPEC cartel continues to exceed its current production ceiling of 30 million barrels per day, with a Platts survey of OPEC and oil industry officials and analysts showing November output at 31.08 million barrels per day.
Against a “backdrop of myriad risks to global oil supply and demand,” OPEC’s semiannual conference “promises to be relatively uneventful,” analysts at J.P. Morgan wrote in a recent research note.
Still, there is “plenty of risk for OPEC ministers to consider and manage,” they said. “Major challenges include: U.S. fiscal troubles, slowing European growth, rising geopolitical risk in the Middle East and Asia and a possible renaissance in non-OPEC production growth.”
