The New Normal or a Passing Phase?
The futures markets are solidly coming into a contango structure, where today’s oil prices are cheaper than prices in the future, a sure sign of current oversupply.
The jig is up for non-committal cartel members
Lately, more analysts are questioning whether OPEC’s current strategy is headed to success or failure.
Price wars could resume once cartel stops trying to limit output
Game theory demonstrates the incentive for members to cheat
Multiple aspects are improving in new price environment
Unconventional reserves give the U.S. the world’s largest supply of untapped oil
International competition could drive down prices
Market needs to bottom out, rebalance and deplete excess inventory