By Matt Thomas, Associate
As we have come to learn over the past few months, OPEC is digging its heels in and seems committed to maintaining market share rather than supporting prices. How long this can continue is anyone’s guess. One thing is certain: OPEC’s actions have played a substantial role in the instability of the commodity markets. There are other fingers left to point, such as the economic & trade policies of the globe and United States that are also driving the instability, however, neither the strong dollar nor the inability to export crude have caused as much impact as the decisions of OPEC.
If OPEC is concerned about the current price environment they will not address it until their next scheduled meeting in December. As one OPEC member stated, “I really see no chance for holding a meeting before the scheduled December 4 meeting, which will reach no concrete agreement to drastically cut production” (Reuters). They are certainly concerned about the past and future impact of the shale revolution in the United States as we have seen domestic crude oil inventories balloon to some of the highest levels in recent history – a true testament to American E&P’s and their technological developments along with good ol’ hard work. As we approach the last quarter, and patiently await the next OPEC meeting, as an industry we must continue to take this time to reflect, learn from history, become more efficient, and do better at what we do great – innovation.