OPEC vs. The Market

OPEC vs. The Market
December 21, 2011 Market Traders Institute

OPEC vs. The MarketOPEC recently announced a decision to increase its member nations’ production ceiling to 30 million barrels a day. This represented the first change in output limits in over three years. Many of the OPEC members left the meeting very pleased with the increase, but the market made a very clear statement to the contrary.

Previously, OPEC had a ceiling of 24.845 million barrels a day (this was the target for 11 OPEC nations excluding Iraq). However, over the last few months the club has grown by one with Iraq now being welcomed back into the policy fold. While the new 30 million barrel output limit does represent actual November production numbers from those 12 nations, the raise in the production limit could not have come at a worse time. OPEC has stated that they will not set individual quotas for…

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