Published in Fox Business
Omar Al-Ubaydli, affiliated senior research fellow at George Mason University’s Mercatus Center, said the meeting’s outcome was 100% predictable and all the bluster about a growing rivalry between Iran, which earlier this year saw relief from international trade sanctions, and Saudi Arabia is a distraction.
The bottom line, he said, is there is no international cartel in any commodity – be it gold, copper, wheat, and even oil. Rather, he contends the swift swoon in oil prices in the summer of 2014 to the recovery crude has made so far this year, is a simple act of market forces.
”The market is bigger than any of these nations,” he said. “There is a large enough number of producers that no one nation is going to do anything to steer prices in one direction. Like any other commodity, there are ups and downs.”
Al-Ubaydli said while it’s good publicity for OPEC nations to make it seem as though there were active policy negotiations, for the most part, it’s smoke and mirrors.
“Western countries were happy to let OPEC think it had power because they could blame [low prices] on any difficulties. OPEC likes to think it has power because they get to say we’re sticking it to the man, and holding the West by its throat…but ultimately it’s about politics in each country,” he said.
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