As the dust settles from yesterday a very simple question arises, is OPEC back?
The cartel coming to the first agreement in terms of a production cut since the financial crisis, and this is as many people have ruled them out from being the material influencer on oil prices vis-à-vis their control over a third of the world’s supply.
The group of 14 countries agreeing in principle to cut production by November, which led oil prices up over five per cent immediately yesterday.
Two questions quickly come to mind, and the first is: if this marks a change in the Saudi led strategy to over-produce to try and kill the high cost producers, what broke?
Also, who will bear the burden of the agreed cuts that are to be determined by or at their formal meeting in Vienna in November? As one would have to question whether or not this actually materializes.