Falling Oil Prices Show OPEC No Longer Controls the Marketby Will Brackett
OPEC is widely expected to extend production cuts that initially boosted oil futures above $50, but prices just keep falling.
That raises concerns that oil prices could struggle to return to their 2017 highs in the mid and upper $50s even if the Organization of the Petroleum Exporting Countries carries over the output reductions through the second half 2017 when it meets in three weeks.
That announcement could boost prices by $2 or $3 a barrel, said John Kilduff, founding partner at energy hedge fund Again Capital.
But that would leave a lot of ground to cover. Thursday’s sell-off sent U.S. crude prices below $46 a barrel, while Brent futures slumped to under $49. Those levels have not seen since Nov. 30, when OPEC agreed to slash output by 1.2 million barrels a day in a bid to shrink huge stockpiles around the world.