Does OPEC Need An Exit Strategy?

4 Dec 2017   OPEC

One of the crucial details that OPEC omitted when it rolled over its production cuts for another year was how the group plans on winding down the agreement. When pressed by reporters, Saudi oil minister Khalid al-Falih said that it was “premature” to talk about an exit strategy. Taking “extraordinary measures” to rescue the oil market without any idea on how to exit the intervention is not unlike what central banks have done over the past decade to juice the global economy. Intervening is easy, backing out is the tricky part. Al-Falih emphasized that any exit would be “gradual,” and he went to great lengths to point out the strong relationship between Saudi Arabia and Russia, and not addressing how to end the deal is critical to that. “For now, the OPEC-Russia bromance continues.” Jamie Webster, an OPEC watcher at the Boston Consulting Group, told Bloomberg . However, if […]

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