over the hill
OPEC still just tryin’ to OPEC, but not doing so well at it.
The cartel confirmed at a Thursday meeting in Vienna that it would extend the production cuts announced in December through March 2018 to try to forestall further collapse of oil prices.
However, they’re just fighting the inevitable. Here’s everything working against OPEC:
- American-produced shale gas and oil (the kind you get from fracking) continues to be cheap and abundant.
- In recent years, investors have poured money into fracking companies, because they’re seen as more reliable than traditional drilling operations — in turn making the former less susceptible to shifts in price and production than the latter. (But bad news, frackers — that funding bubble isn’t expected to last forever.)
- Global demand for oil was lower than expected this year, and a recent analysis from consultancy Roland Berger predicts that industrialized nations’ appetite for oil has peaked, The Economist reports.
- The growth of the electric car market and increasingly computerized transportation means a push away from oil and gas, according to the New York Times.
To close, a brief list of metaphors used to describe OPEC’s ongoing struggles: relying on “Band-Aids to get through crises,” bringing “a knife to a gunfight,” and, our personal favorite, “U.S. shale’s the wild horse that OPEC just can’t tame.”