{"id":14533,"date":"2015-11-18T08:25:14","date_gmt":"2015-11-18T13:25:14","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14533"},"modified":"2015-11-18T08:25:30","modified_gmt":"2015-11-18T13:25:30","slug":"opecs-bad-bet-by-the-numbers","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14533","title":{"rendered":"OPEC\u2019s Bad Bet By The Numbers"},"content":{"rendered":"

OPEC\u2019s Bad Bet By The Numbers<\/a><\/h3>\n
What will happen to the economic fortunes of OPEC members if it turns out the Saudis and their Gulf Arab allies (UAE, Kuwait, and Qatar) bet on the wrong horse in November 2014? With the wager Saudi Oil Minister Al al-Naimi announced on market forces as the cure for the pressures on OPEC\u2019s global market\u2014a wager which their fellow OPEC members questioned and only reluctantly supported \u2013 could this backfire spectacularly for the cartel\u2019s members?<\/div>\n
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As the December 4, 2015 OPEC meeting in Vienna approaches, OPEC members have the tools to assess the impact of \u201clower for longer\u201d crude prices on their countries. Serendipitously, the IEA in its recently published World Energy Outlook 2015 describes a low price scenario in which crude stays around $50\/barrel through the current decade\u2019s end. It is based on four assumptions: lower near-term global economic growth, a less unstable Middle East, continued OPEC emphasis on market share, and resilient non-OPEC supply. Equally serendipitously, the IMF October 2015 World Economic Outlook projections are premised on $51.62 crude in 2015 and $50.36 crude through 2020 and therefore show the impact ~$50 crude through the end of the decade would have on OPEC in general and the economies of individual OPEC members.<\/p>\n

It\u2019s not very pretty with crude at ~$50 per barrel\u2014and therefore is likely to be uglier since the OPEC basket crude price in 2015 will average ~$47 and OPEC basket crude, which generally trades at a discount to Brent crude, would average below $50 in the IEA scenario.<\/p>\n

Economic Consequences of a Wager Gone Bad<\/strong><\/p>\n

In national currencies, it appears that OPEC members will show steady, if not spectacular, growth through 2020 with \u201clower for longer crude,\u201d and that the GDP of each member will exceed 2014 levels before the end of the decade.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

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OPEC\u2019s Bad Bet By The Numbers What will happen to the economic fortunes of OPEC members if it turns out the Saudis and their Gulf Arab allies (UAE, Kuwait, and Qatar) bet on the wrong horse in November 2014? With the wager Saudi Oil Minister Al al-Naimi announced on market forces as the cure for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[184,418,1775,5332,600,2752],"class_list":["post-14533","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-crude-oil","tag-imf","tag-oil-price-collapse","tag-oilprice-com","tag-opec","tag-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14533","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14533"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14533\/revisions"}],"predecessor-version":[{"id":14535,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14533\/revisions\/14535"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}