Oil Tumbles As Market Questions Whether An OPEC Production Freeze Is Even Remotely Possible?
"Whether a freeze occurs or not is likely to be the trending gossip among speculators for the next month, at a time when such talk is exerting greater-than-average pull on the crude price, but as OilPrice.com's Gregory Brew notes, a question worth asking is whether a freeze is even possible, given the state of OPEC and the increasingly divergent interests of its fourteen members."
Divergent? The interests are more closely aligned than they ever have been. But they are aligned in a way the oil bulls do not want, towards production, not towards a production freeze.
They all need money like a broke drug addict, so they will sell, sell, SELL. as much as they can as fast as they can. Failing to do so means, impoverishment; the likelihood of losing the existential war between the Shia, and the Sunni; and/or internal war/rebellion/revolution when the welfare money runs out.
"Other OPEC members, including Nigeria and Venezuela, are facing nothing less than an economic Armageddon and are desperate for an increase in price. Nigeria however has seen its production decline to a 30-year low due to violence in the Niger Delta. Venezuela is less likely to make waves, as its economy has been hit harder than any other OPEC member by the current crisis, so any recovery in price would be worthwhile. But Nigeria probably won’t agree to freeze at current levels: like Iran, Iraq and Saudi Arabia, its leaders will want to pump more before bringing production to a halt."
This is the same predicament nearly all of the other producers in OPEC are in. The House of Saud may have another 4 years, but really how comforting must that be with oil supply and demand in the state it is?
Pumping as fast as possible sound like a better option. They all know this, and are trying to scoop up as much market share as possible to keep their rivals from scooping up as much market share as possible.