PROFILE
producers reorganise and if there is a supply-demand deficit in sectors . In this case , Iran may face excess demand if it sticks to the targets it has agreed . Such instances can potentially instigate market poaching and fierce competition within , which may threaten to break the deal and / or force prices lower until we get further evidence on the feasibility of the deal , oil is unlikely to go above the USD 55 level .
ME Vs . US Oil has currently found a temporary anchor around the $ 54 a barrel mark . While OPEC members are complying with production , the increase in US drilling rigs is likely to be adding to supply . Investors are worried that the increase in US production figures may threaten the OPEC deal , as members from the cartel may worry over the loss of market share . The significant showdown this year could be between the industry heavyweights – the Middle East oil producers and the US shale and gas industries . Whoever emerges victorious would determine the path of prices in 2017 .
An important mention Saudi Arabia truly deserves to be given another mention for its influential role last year . The OPEC heavyweight not only gathered the cartel but also stepped up to take the bigger production cutback itself so Iran could maintain pre-sanction levels of production . The exceptional and unprecedented move by Saudi in setting aside differences with Iran for the greater good is commendable . The commodity of the year 2017 is most certainly going to be oil , and without doubt the producer and star of the great show will be OPEC . Time itself would be the ultimate judge .
12 July 2017