Paper: OPEC worked to derail U.S. shale
OSLO, Norway, July 1 (UPI) -- Members of the Organization of Petroleum Exporting Countries altered their behavior to limit the role of U.S. shale oil producers, a Norwegian paper found.
"There is no consensus in the literature on how OPEC behavior affects crude oil prices," a discussion paper published Friday by Pal Boug, Adne Cappelen and Anders Rygh Swensen with Statistics Norway read. "Some studies treat the oil market as a standard competitive market where OPEC plays no important role, whereas others argue that OPEC is a dominant producer with a competitive fringe or a cartel that adjusts its production to influence crude oil prices in a way that benefits the member states."
According to OPEC, its mission is to coordinate member state polices to ensure steady income and oil market stabilization. This year, as crude oil prices dropped below $30 per barrel, the Saudi Cabinet of Ministers agreed to communicate with major oil producers in a way that would reduce fluctuations in crude oil prices, which peaked above $100 two years ago.
OPEC members earlier this year suggested freezing production at January levels in an effort to influence a market that at the time was skewed heavily toward the supply side. That proposal collapsed after Iran, one of Riyadh's main adversaries, said it wanted to regain a market share lost to sanctions.
The Norwegian authors point to research that suggests OPEC operates under "a cartel model," where as the dominate global producer, it's the one with the most influence over crude oil prices. Other studies find that it's largely Saudi Arabia that "fits the description of a dominate producer." (by Daniel J. Grabber, UPI)
OPEC members earlier this year suggested freezing production at January levels in an effort to influence a market that at the time was skewed heavily toward the supply side. That proposal collapsed after Iran, one of Riyadh's main adversaries, said it wanted to regain a market share lost to sanctions.
The Norwegian authors point to research that suggests OPEC operates under "a cartel model," where as the dominate global producer, it's the one with the most influence over crude oil prices. Other studies find that it's largely Saudi Arabia that "fits the description of a dominate producer." (by Daniel J. Grabber, UPI)