Editor’s Note: Below is a brief excerpt from an institutional research note written by Hedgeye Potomac Senior Energy Policy analyst Joe McMonigle and Commodity analyst Ben Ryan. For more information about our research contact sales@hedgeye.com.
The constant newsiness and lack of credibility around a speculated production freeze has been well covered by our energy policy analyst, Joe McMonigle. Below we raise two important points.
With regard to a quota revision in the near-term:
- First, a topic we’ve harped on before - OPEC quotas have had no bearing on actual production levels historically – the only impact has been a short-term spot price impact.
- The fundamental story at play is one that questions the timing of speculated revision in quotas – why would OPEC freeze production now that they’re winning the global market share game for the first time in a long time? Saudi Arabia has alluded to U.S. Shale being a barometer for forward-looking policy.
**For more, watch McMonigle discuss recent OPEC developments in the video, "OPEC’s ‘Risky Gambit’ (What The Media Totally Missed)."
