{"id":29532,"date":"2018-01-09T07:44:16","date_gmt":"2018-01-09T12:44:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=29532"},"modified":"2018-01-09T07:44:16","modified_gmt":"2018-01-09T12:44:16","slug":"five-oil-market-myths-that-need-dispelling-fuel-for-thought","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=29532","title":{"rendered":"Five oil market myths that need dispelling: Fuel for Thought"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/blogs.platts.com\/2018\/01\/08\/5-oil-market-myths-need-dispelling-opec\/\">Five oil market myths that need dispelling: Fuel for Thought<\/a><\/h3>\n<div class=\"entry\">\n<p>The oil market has come to be defined by several narratives over the past couple of years:\u00a0market rebalancing, OPEC versus shale, Russia\u2019s delicate relationship with OPEC, OPEC\u2019s\u00a0conformity with production cuts with the latest deal extension running to end of 2018 and shale\u2019s resilience to lower prices.\u00a0But these frameworks have created a narrow ideology that could harm the way producers participate in the oil market this year and beyond.<\/p>\n<p><strong>Myth 1: OPEC\u2019s exit strategy means exi<\/strong>t<\/p>\n<p>The idea that the 24 producers who came together and struck a deal to cut production by 1.8 million b\/d in November 2016 are somehow going to \u2018exit\u2019 the alliance later this year is\u00a0misleading. There will be no exit when OPEC, Russia and other non-OPEC producers decide the market has rebalanced\u2014based on OECD\u00a0stock levels reaching their five year average \u2014 rather a continuation of the grand alliance under amended, and most probably looser,\u00a0terms.<\/p>\n<p><span id=\"more-27045\"><\/span>OPEC\u2019s hands are somewhat tied: unwind from the deal and undo all the good work achieved and so must continue managing the market in another guise to create stability\u00a0and encourage long-term investment in oil.<\/p>\n<p>Gary Ross at <a href=\"https:\/\/www.platts.com\/product-list\/all\/analytics\">Platts Analytics<\/a> has been talking of cuts \u201cinto perpetuity\u201d since the historic deal\u00a0was made and informed industry sources note that the exit strategy is the wrong phrase to be\u00a0using. But while there is uncertainty as to what that new agreement will look like, the market will anxiously hang on to the exit strategy term\u00a0and these jitters could serve to keep an ultimate cap on prices.<\/p>\n<p><strong>Myth 2: OPEC\u2019s top priority is market rebalancing<\/strong><\/p>\n<p>Market rebalancing may be the measure, backwardation may be the means but price is the ultimate goal.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Five oil market myths that need dispelling: Fuel for Thought The oil market has come to be defined by several narratives over the past couple of years:\u00a0market rebalancing, OPEC versus shale, Russia\u2019s delicate relationship with OPEC, OPEC\u2019s\u00a0conformity with production cuts with the latest deal extension running to end of 2018 and shale\u2019s resilience to lower [&hellip;]<\/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":[3],"tags":[1180,2245,17833,17834,600,17835,694,17832],"class_list":["post-29532","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-myths","tag-oil-market","tag-oil-market-myths","tag-oil-production-cuts","tag-opec","tag-platts","tag-russia","tag-the-barrel"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29532","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=29532"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29532\/revisions"}],"predecessor-version":[{"id":29533,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29532\/revisions\/29533"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=29532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=29532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=29532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}