Organization of Petroleum-Exporting Countries

Submitted by Rakesh Upadhyay via OilPrice.com,

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran.

The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.

Earlier today, the OPEC released its latest monthly forecast which echoed what the IEA said yesterday, as the organization which Roseneft CEO Sechin said has "practically stopped existing", said shrinking U.S. output and massive cuts to investment in new projects will reduce the global oil glut over the course of this year, potentially pushing world-wide oil production lower than demand in 2017.

Submitted by Eugen von Bohm-Bawek via Bawerk.net,

Another month, another OPEC meeting beckons for 2nd June. But unlike typical meetings on the Danube (let alone dust filled haze of Doha), the producer group might just have a new King in town. It comes in the form of Russia; the number one global producer that’s not even technically a member of the cartel. Confused? Don’t be. The argument is quite simple.

Following IEA's report this morning which proclaimed OPEC production at record highs but forecast a drop in the global oil glut in the first half of the year (due to demand from India, as the current marginal demand driver - China's teapot refiners - have since slowed dramatically), WTI crude prices have jumped back above $47 for the first time since November 2015.

Strength in the first quarter was driven by China, Russia and by transport fuel use in India, which is “taking over from China as the main growth market for oil.”

Russia is moving full steam ahead with its plan to kill the petro-dollar, and is burying OPEC's influence along with it. 

As we reported earlier, Russia has taken its next step toward de-dollarization by launching its own benchmark oil futures contract that will price oil in rubles instead of USD. Now, it appears as though Russia has deemed it is time to start chipping away at OPEC and its power within the oil space.

According to Reuters, Rosneft CEO and close Putin ally Igor Sechin had some harsh words to say about the oil cartel, and effectively announced its demise.