Page 110 - Mariners Cricket Club (Singapore) - Souvenir Magazine 2020
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Responding to the price rebound Kazakhstan, Mexico, and perhaps most
importantly, Russia — among others.
With this upward-trending market in mind,
OPEC endorsed a production increase to Historically, OPEC nations and Russia viewed
stabilize prices during their semi-annual each other as rivals instead of allies, with the
meeting in June of 2018. This was later rescinded latter as the world’s third-largest oil producer
as the bear market of late 2018 materialized in behind the US and Saudi Arabia. Since
response to concerns of an oversupplied oil December of 2018, OPEC+ members once again
market, sending oil and diesel prices into a control most of the world’s crude oil supply,
downward spiral to close the year. combining their respective influences on the
global market to infl uence prices.
While all of these factors initiated the transition,
the emergence of ‘the big three’ crude oil While this new partnership may offer additional
producers expedited OPEC’s more reactive leverage to OPEC+, fears of global economic
role in the marketplace. slowdown amidst the US-China trade war
may continue to overshadow the upward
In July 2019, OPEC again decided to maintain momentum of supply cuts.
production cuts. The market’s slower economic
growth and its impact on global demand for COVID-19 and the crude oil price crash
crude oil and transportation fuels greatly
reduced OPEC’s potential to push prices With all of these developments in the rear-
upward by restraining oil supply. view, 2020 has presented completely novel
crude oil environments that involve OPEC,
Since their decision to implement supply cuts its allies, and the greater economic landscape
of over three mmbd from October 2018 levels, which culminated in crude oil prices sinking
OPEC’s removal only modestly increased well below zero for the first time in history.
prices during their most recent round of cuts. In a series of unprecedented global events, the
This is due in large part to US oil production supply and demand balance swung swiftly
growth counterbalancing OPEC’s efforts to toward surplus. Saudi Arabia and Russia
remove supply from the market. entered into a price war that resulted in a
produce-at-will mentality that sent production
OPEC’s allies to historic highs. At the same time, demand for
OPEC transitioned to become OPEC+. The crude oil products, notably gasoline and diesel,
addition of the ‘+’ contingent of non-members disappeared in a matter of days and weeks
indicate countries who agree to team up on as COVID-19 shuttered businesses and kept
organizational decisions but are not bound by consumers at home.
true membership. The alliance now includes SMNS
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