Well, Shoot, This Isn't Working -- July 23, 2017

From The Wall Street Journal: OPEC grapples with growing threats to oil deal. The deal intended to withhold about 2% of global oil supplies has failed to raise crude prices. LOL.

OPEC is worried that its plan to drain a global oil glut—and thereby raise crude prices—isn’t working.

A long-planned meeting in St. Petersburg, Russia, on Monday to discuss the oil market with big producers outside the cartel has turned into a critical gathering. Over the weekend, the Organization of the Petroleum Exporting Countries said, its ministers have held a series of “intensive consultations” about the challenges for an output-cutting deal the 14-nation cartel struck last year with Russia and other big producers.

The agreement was supposed to take almost 1.8 million barrels of crude oil off the global market and drain an oversupply that has weighed prices down for three years and sent a shock through the economies of oil-producing economies. But prices have remained stubbornly low as the glut persists. Brent, the international benchmark, fell 2.5%, to $48.06 on Friday because of doubts about OPEC’s ability to turn around the market.

And then this.

Libyan and Nigerian officials have signaled a willingness to limit their production once it stabilizes, but the details are being negotiated.

An OPEC official said Iraqi production would also be discussed, as the cartel member’s output has remained much higher than its agreed upon levels.

Compare that to what I posted just a few hours earlier: Saudi Arabia has an Iraqi problem. Nigeria and Libya are red herrings.

Meanwhile, oilprice.com weighs in on Libya's production.

Conflict-torn Libya, divided between rival factions in the east and the west, recently reached 1 million bpd of crude oil output—for the first time since 2013.

Bottom line: no matter how you spin it; no matter how many times OPEC has meetings, there is a huge global crude oil glut. Period. Dot. Every Arab for himself. And we're going to see exactly how cheap crude oil can go before US oil companies cry "uncle." 

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