So What’s Up With OPEC?

“What we’ve got here is…failure to communicate”–Warden from Cool Hand Luke

Oil rose  after OPEC failed to reach an agreement on production targets for the first time in at least 20 years and U.S. crude inventories fell more than analysts forecast. Our really close friends and allies in Libya, Angola, Venezuela and Iran where opposed to higher production limits. What a shocker.

OPEC’s failure to act like a true Mafia family is in question now and may show that some of the members may in fact have limited spare capacity. Saudi Arabia, which led the proposal to increase the cartel’s production, moved quickly to reassure nervous traders that some members will carry on with plans to raise their output in an effort to keep a cap on prices.

They ended their meeting in Vienna with no agreement on production targets, as six members rejected the proposal to raise the ceiling by 1.5 million barrels per day.

Is the cartel busted? Nah, too much loot involved, the thieves will eventually figure it out.

Maybe Goldman had a dissenter planted at the meeting as they went bullish yet again on oil a couple weeks ago. Don’t they have an office in Vienna?

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