OPEC Turns 60 At 'critical Moment' For Virus-hit Oil
Mohammad Ali (@ChaudhryMAli88) Published September 27, 2020 | 09:40 AM
London, Sept 27 (UrduPoint / Pakistan Point News - 27th Sep, 2020 ) :OPEC faces a critical moment in its 60-year history with the coronavirus crushing crude demand and prices, discord among its members, and threats from a world seeking cleaner fuels.
Founded on September 14, 1960, by Iraq, Iran, Kuwait, Saudi Arabia and Venezuela who sought to control crude oil output, OPEC currently comprises 13 members including nations from Africa and Latin America.
The 60th anniversary "comes at a critical moment in its history", UniCredit analyst Edoardo Campanella said in reference to the Organization of the Petroleum Exporting Countries.
"Its ability to steer the oil market in its favour has never been put in question to the extent it is now," he noted.
- 'Relevant role' - The Vienna-based institution convenes for regular meetings to assess the state of supply and demand in the marketplace, and its pronouncements can still spark major price swings.
That ability has dimmed in recent years however, prompting it to join forces with ten non-OPEC producers including Russia to curb their collective output.
OPEC+ essentially wanted to counter surging energy supplies from shale rock in the United States and help clear a stubborn supply glut on world markets.
Today, OPEC pumps about one third of global oil -- but OPEC+ accounts for almost 50 percent, giving it greater clout.
Carlo Alberto de Casa, trader at Activtrades, insisted that the cartel retains a "relevant" function in the market, dismissing talk the organisation was a "has-been".
"They are slightly less influential compared to the past, also due to production of non-OPEC countries and new extraction techniques. But I still see a role for OPEC," he told AFP.
This despite the larger OPEC+ in March failing to agree on a new strategy -- with Russia refusing cartel kingpin Saudi Arabia's request to cut their collective output and combat a virus-fuelled slump in crude demand.
In response, top global exporter Saudi slashed its prices and raised output to preserve market share in the face of Russian opposition.
The Saudi-Russian price war, in tandem with the worsening Covid-19 pandemic, sent oil prices off a cliff -- and even caused New York's light sweet crude contract to briefly turn negative in April -- meaning producers paid buyers to take the oil off their hands.
After the unprecedented market crash, OPEC+ in May slashed up to a fifth of its output -- a move that triggered a sharp rebound in crude prices to current levels around $40 per barrel.
Added to the supply backdrop, the United States, now the world's biggest oil producer, curbed the pace of costly shale extraction.
Rystad Energy analyst Paola Rodriguez-Masiu, while noting that OPEC has lost market share in recent years, said the cartel still has an important role to play because it possesses the largest amount of accessible crude.
This meant that extracting its oil resulted in fewer carbon emissions, she said.
"I would argue that OPEC would become more and more important" in the future, she concluded.
Related Topics
Recent Stories
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 29 April 2024
Today Gold Rate in Pakistan 29 April 2024
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 28 April 2024
Today Gold Rate in Pakistan 28 April 2024
Fresh wave of rainfall in AJK continues for the second consecutive day
Babar, bowlers help Pakistan level series 2-2 against New Zealand
Attack in restive Chilean province leaves three police officers dead
PM, Saudi Royal court advisor discuss ways to boost economic ties
England clinch third successive Women's Six Nations Grand Slam
DC Bahawalnagar leads fight for fair bread prices
Sheffield Utd relegated from Premier League
02 proclaimed offenders arrested by Wah Police
More Stories From Miscellaneous
-
Stage Drama Mohabati Manhoon presents in Arts council Larkana
14 hours ago -
Wheat farmers in a fix on price, procurement mechanism
1 day ago -
Modern tools to help transform crime investigation procedures
1 day ago -
Sanam Marvi captivates audience with mesmerizing performance
2 days ago -
Modern Education Techniques: A pathway to achieve economic development
3 days ago -
Kite Flying: From cultural festival to deadly sport
3 days ago
-
PDMA predicts gusty wind, rain with thunder, hails
6 days ago -
Iranian president Raisi given guard of honour at PM House
7 days ago -
Intellectuals, writers accolades Naseer Mirza on his literary contribution
8 days ago -
Bahawalpur Adabi Sangat hosts memorable mushaira
8 days ago -
Cattle farming vital to alleviate poverty in rural areas
8 days ago -
Pakistan: A land of tourism, archeological wonders
8 days ago