Opec minus

摘要

The Opec+ group’s failure to agree on production cuts beyond this month opens the door to plunging oil prices and a potential race for market share. Ministers have not rejected the possibility of further talks, but Russia’s resistance to Opec’s recommendation for another 1.5mn b/d of cuts for the rest of 2020 to address the coronavirus-inspired demand shock appears to have efectively ended the group’s three-year alliance. Opec+ signatories will be free to produce as much as they want from next month. The situation could develop along similar lines to 2015-16, after the Saudis led Opec to refuse to cut further in response to rising non-Opec production, triggering a race for market share with US shale that Opec eventually conceded. But investors are demanding more fnancial discipline in the shale space, and the fght may turn out diferently this time.