The question is, “What is up with OPEC?”
The New York Times reports from Vienna, where Saudi negotiators both publicly stated support for an agreement to reduce production and privately spread word that they would not be bound by the production targets.
In June, King Abdullah pledged that his country would pump at full tilt to bring prices down. In August, the kingdom increased its production to 9.7 million barrels a day, the highest in three decades. Saudi Arabia is now producing around 9.5 million barrels a day, 600,000 barrels a day more than its quota.
“This seems to set Saudi Arabia up as the unilateral decision-maker on output for the fall,” said Greg Priddy, an energy analyst at Eurasia Group, in a research note. “Clearly, other OPEC members are not going to trim their own production without Saudi Arabia returning to its quota. Saudi Arabia also seems to be eager to avoid headlines about it cutting production in advance of the U.S. elections.”
And that concludes today’s episode of “Energy Jeopardy.”