STOCK MARKET WATCH -- Wednesday, 9 December 2015

[Proserpina]

7. OPEC's Oil Market Disarray Looks Like 1990s Slump All Over Again

http://www.bloomberg.com/news/articles/2015-12-07/opec-s-oil-market-disarray-looks-like-1990s-slump-all-over-again

OPEC has dropped any attempt at trying to fulfill its founding mission and manage the oil market, sending global benchmark Brent crude to a six-year low. For Saudi Arabia’s Ali al-Naimi, the most powerful and longest-serving of the group’s oil ministers, it may have seemed like history was repeating itself.

There are several striking parallels between the Organization of Petroleum Exporting Countries’ current situation and the period from 1997 to 1999, when the group lost control of the market and oil slipped to less than $10 a barrel. While investors may wonder whether markets will follow a similar trajectory this time, it’s important to remember that OPEC emerged from the crisis to see oil prices surge all the way to almost $150 a barrel. If the parallels hold, markets could be in for a wild ride.



Big OPEC Members Boost Production

Nearly two decades ago, Venezuela had a growth spurt that lifted its output from 2.2 million barrels a day in 1992 to 3.5 million barrels a day six years later. Saudi Arabia responded by increasing its own production, flooding the market. This time around, Saudi Arabia has embarked on a production spree -- pumping a record of 10.6 million barrels a day earlier this year -- while Iran plans to boost daily output by as much as 1 million barrels next year after sanctions are lifted.



and the dominoes continued to fall...