Here's what I have for price changes now that the final numbers are in. As I thought, there was not much change from lasts evening's post.
*Heating and stove oils still show an increase of 4.5 cents a litre.
*Diesel fuel shows an increase of 4.9 cents a litre at the pumps, and...
*Gasoline shows an increase of 5.5 cents a litre coming this Thursday morning.
OPEC makes a deal
*In spite of the odds, OPEC members have signed a deal that cuts production between its members by a whole 1.2 million barrels, but as the news says today with oil, a lot of people still have their doubts and await proof that the deal will hold.
While members of OPEC have signed on, the real proof will come with "compliance"- a vitally important factor in ensuring that OPEC itself still has the influence in the oil market that I still believe it has lost.
Even though the deal has been delivered, latest figures from OPEC indicate that November month is one of the heaviest months that OPEC has produced oil, and all in spite of meeting over an agreed to cut. OPEC produced nearly 34.2 million barrels a day compared to 33.8 million barrels a day in October.
Meanwhile, non-OPEC oil producing nations like Russia, will meet with OPEC tomorrow to discuss an arrangement to cut production as well. Russia produced 11.2 million barrels a day last month, the highest in thirty years.
Will oil hold? I don't think so...
*While OPEC members remain hopeful that prices will increase like they have, already sentiments against OPEC members not cheating are beginning to permeate the market with doubt. With a history of OPEC members cheating on their own quotas, and rivalries between Iraq, Iran and Saudi Arabia abounding, there is rank suspicion between members as well as an underlying distrust. Saudi Arabia and Iran face off against each other over a civil war in Yemen, while Iraq and Iran have ideological differences that stretch generations.
Pare with that the idea that others await on the sidelines to step in where others have backed out, leaving some with "breathing space" and a chance to recover. OPEC had shale producers on the ropes, coming within a hair of knocking the US oil industry back to the 1990's where OPEC first went all out in flooding the oil markets, stripping the US of just about all of its market-share. Now frackers have been given the time to adjust, control costs and lower them in a lot of cases.
The shalers will step in and US domestic response will be strong and pick up the loose ends. Other non-OPEC producers will smell an opportunity to recover lost share and will also respond. It will be hard for the Russians not to respond in kind.
What has forced OPEC to flinch first will get them in the end. OPEC blinked when it became readily apparent that they themselves have gotten too used to the revenues garnered from oil resources. That's a lesson that everyone has failed to notice yet: in spite of OPEC oil producers being completely different in one context, they're really no different than any other corporation who has long tried to corner a market...then failed.
Call this a "commentary" this week!