Lies, damn lies, and commodity forecasting!

Global oil prices have fallen more than 50% since mid-2014, Saudi Arabia is sitting on the sidelines, and global demand remains the monster in the closet. OPEC’s Thanksgiving Day “commodity massacre” set the stage for another leg down in oil prices, when the organization opted to make no change to current production targets, nor did they set plans for an extraordinary meeting in February. Essentially, OPEC said “See you in June,” which gave neither support nor leadership to an increasingly oversupplied market, Fig. 1. The current oil market oversupply was driven by slowing demand growth, combined with ongoing significant supply growth, driven by the big ramp in U.S. onshore production, Fig. 2.

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