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Published in Investor's Business Daily
Novak called Saudi Arabia’s insistence that Iran join in a freeze “unreasonable” and said that he thought a deal in Doha was assured. But Omar Al-Ubaydli, an affiliated senior research fellow at George Mason University’s Mercatus Center, told IBD earlier that Russia was already “basically producing at capacity.”
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Published in Investor's Business Daily
But a freeze, no matter how many countries join, won’t have a real, fundamental impact on prices, said Omar al-Ubaydli, an affiliated senior research fellow at George Mason University’s Mercatus Center. “Russia is basically producing at capacity, so a freeze doesn’t really mean anything,” he told IBD. “It just means they aren’t going to invest in increasing their capacity. That’s already something that’s financially unwise to do. So it’s all show and politics and grandstanding.” While there might be a little spike or dip after the Doha meeting, it won’t set the stage for a quota system in the future, Al-Ubaydli said. Published in Investor's Business Daily
Omar al-Ubaydli, an affiliated senior research fellow at George Mason University’s Mercatus Center, pointed out that Saudi Arabia and Iran have cut off diplomatic ties with each other, and Russia is engaged in a proxy war in Syria against other OPEC members. “The idea of cutting production is never going to work in the near future,” he told IBD. “In order for a cut to work, you need to be able to effectively monitor each other.” Al-Ubaydli sees a drop in production from global oil markets over the next 12 months, as output from older oil fields decreases and new investment slows. “Output will decrease, but not because cartel members are sitting at a table playing with numbers,” he said. Continue |
Omar Al-Ubaydli
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June 2020
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