Is a massive 2016 hit for rapper G-Eazy and the East European roots, lady with the sonic voice, the very refreshing Bebe Rexha.
OPEC seems to have really stuck to its production cuts, but the markets instead of giving the thumbs up to the Sheikh's, are instead saying that the wild bunch have disciplined themselves because they are DESPERATE.
With shale oil in the picture, the Sheikh's can no longer sing Me, Myself and I will determine the price of crude oil.
Moneyweek.com has the story. Read Below :
The oil price has been pretty well behaved so far this year.
Compared to the gyrations of 2014 and 2015, oil has taken it easy, meandering around $50 to $55 a barrel.
The global glut seems to be drying up slowly, and prices have been on the recovery path.
But will the period of calm last? Don’t bet on it…
Opec must be desperate – it’s actually sticking to its plans
In November, oil cartel Opec cracked. Led by Saudi Arabia, it decided to cut crude production by around 1.2 million barrels a day starting this year. And – very unusually – it so far seems to be sticking to it.
As the Financial Times reports, it looks as though production in January fell by 1.1 million barrels a day. “This implies more than 90% compliance in the first month of the six-month deal to tackle excess inventories.”
If (and it’s a big if), it manages to stick to this, then there will “no longer be an oil surplus in the second half of the year”, according to Opec. Combine that with higher-than-expected global demand, and you have pretty healthy prospects for the oil price, on the face of it.
This isn’t just Opec marking its own homework. The International Energy Agency came to a similar conclusion last week. The cuts made by Opec have been among “the deepest in the history of Opec output cut initiatives”.
It seems that Saudi Arabia in particular has grown desperate enough to give the oil market a sharp kick in the backside. The big question for the Saudis (and the rest of us) is: what will it actually mean for oil prices?
In short: it’s not going to be easy to keep them riding high.
No more boom and bust? Famous last words
Energy consultant Robert McNally made an interesting point earlier this month in the FT. He notes that almost ever since oil became an important commodity, there have been efforts to control production with the goal of minimising the “boom and bust” nature of the market.
From the Standard Oil Trust, to quotas on American producers from the 1930s to the 1970s, to Opec, “governments and producers… sought to control how much oil gushed from the ground”. Some groups were more successful than others, and some time periods were more stable than others.
But right now there is no “swing producer” – no individual group that has enough clout to even attempt to control the price. Opec screwed up, basically – during the 2000s boom, the oil price went high enough to encourage the exploitation of US shale oil.
Once shale got over the initial hurdles, producers managed to get it out of the ground successfully, and began working on ways to make the process more efficient.
So now Opec isn’t the sole big player anymore. You have the shale producers too. And they are able to move much more quickly than traditional oil market players.
As David Wech of JBC Energy tells the FT: “Opec can tighten the market, but we’ve always doubted they would be permanently able to shift the market balance. The US shale industry has been a game changer because it can respond to price signals in less than a year.”
