So maybe OPEC does still matter. After deciding to keep its production levels unchanged at 30 million barrels a day and triggering Friday’s nearly 10 percent selloff, the cartel proved it can still cause huge swings in oil prices‐even if it’s in the opposite direction that most of its members wanted to see.
Iran, Iraq, Libya, and Venezuela were all hoping for a cut of at least 1 million barrels to keep prices from going lower. Citibank analysts estimate that the world is producing about 700,000 barrels a day more than total demand requires. With international oil prices below $70 for the first time since 2010, most OPEC member countries will have trouble keeping their budget deficits in check. According to an estimate by Goldman Sachs last month, only Kuwait, the UAE, and Qatar are safe below $70.