Bassam Fattouh, OIES Since 1986 the year-on-year change in global oil demand has generally exceeded total non-OPEC supply, with the gap increasingly met through OPEC. This is leading to a gradual decline in spare capacity and upward pressure on oil prices. Analysing OPEC’s response to this shows a cyclical pattern and an asymmetry is also evident, in terms of their objectives in a falling market, when they seek to defend oil prices from falling below some level deemed unacceptable; as well as in a rising market where OPEC seek to increase output in response to customers’ demand at market determined prices. The mechanism and issues associated with these responses are described. Looking ahead, a range of uncertainties continue to exist, including these asymmetrical responses, as well as issues relating to inventories, spare capacity, and the views between OPEC and oil importers.
Tags: 2009 conference, Export, Fossil fuels, Global, Import, Non-OPEC, Oil markets, OPEC, Pricing, Production capacity, Risk, Supply demand balance, sustainable energy the next crisis, Upstream, Volatility, Wholesale marketOPEC behaviour through the lenses of the oil price cycle 2009.pdf 1.43 MB