Looks like prices at the pump have nowhere to go but down. Thanks to typical Cournot competition resulting from lack of collusion, all the OPEC players lose.
Not even Qatar will like WTI below $71, or Brent below $75:
Update: as WTI took out stops @ 69.50, nearly kissing the 69 level, we’re now kinda below the territory the pundits mentioned oil would go without an OPEC cut. A couple thoughts:
- Wow. Oil falls fast.
- Unlike the moves in several other commodities, I’m not convinced this oil move is principally a strong-USD bet. I think it’s mainly just a way-oversupplied oil market with lots of players who can’t feasibly stop producing. The countries need even the discounted revenue to maintain budgets and services. So, for oil-consumers, this is about as close to ‘Happy Christmas from the Middle East’ as we’re going to get.