Does OPEC still set oil prices?
(Note: all the sources
listed in the “Balanced” section)
It is well known that energy production in North America has grown in recent years in response to advances in technology. In fact, some energy leaders are now projecting that North America will be a net exporter of energy by the year 2020. North America’s gain means a decreased importance for Saudi Arabia and other OPEC countries. Currently, OPEC supplies 40% of the world’s oil and announced changes in production volumes have an immediate effect on oil prices. But, does OPEC still have enough influence to set pricing by controlling production output? A strong OPEC able to set prices would mean higher energy prices and that would be bullish for all energy producers. A weak OPEC could mean lower prices and a bearish signal for owners of energy stocks. 1, 2