OPEC Holds with Russia and the Deal Rolls On


The 173rd Meeting of the OPEC Conference and the 3rd OPEC and non-OPEC Ministerial Meeting
Vienna, Austria, 30th November, 2017

Like every OPEC Meeting, there was much conjecture beforehand but I felt there that there was only one option,
to hold where they were and roll on, supposedly, for at least another nine months. Ministers seemed keen not to fuel gossip and upset the markets before any official agreement had been made particularly as traders had already built the anticipated cut in to pricing.

The choice was clear – hold on and maintain prices at this level, falter and watch them crash, cut further, push them higher and open the Shale floodgates. Not actually that simple but an easy and quick explanation. However, in the short term that is the right easy solution and OPEC has often thought short term. Yet, following on from the original decision to bring in the cuts, the strategy has worked well particularly as only a couple of years ago OPEC was again being written off as having lost control of the market. But there was a plan that many couldn’t see. The issue now is that re-balancing in one sector requires something similar in another. With the price of oil holding around the $60 level, 14% up on where it was at the last meeting and 40% higher than it was two years ago, even higher prices could work against OPEC.

John Hall

John joined Alfa Energy in 2013 as Chairman, where his specific interest is the development of the company’s profile in the areas in which it primarily operates - across the EU and the US. He is Fellow of the Energy Institute, a Member of the Parliamentary Group for Energy Studies, an Associate Member of the Chartered Institute of Purchasing and Supply, and a Member of the Market Research Society. He began his long career in the industry when he set up John Hall Associates in 1973, a company which merged with Energy Quote in 2009 and currently trades as Energy Quote JHA.