It seems that at least some OPEC members are starting to panic:
War of words breaks out among OPEC members (CNN Money) – Is the pain of low oil prices becoming unbearable for OPEC?
After watching the price of crude oil collapse by more than 65% to a 12-year low, there are signs that OPEC may have had enough.
Nigeria’s top oil official and OPEC President Emmanuel Kachikwu said the cartel is considering an emergency meeting, perhaps as soon as next month. At issue is whether OPEC would agree to cut production, a move that could help stop the crude price freefall.
“I expect to see one. … There’s a lot of energy currently around that,” he told CNN.
“I think a … majority in terms of [OPEC] membership are beginning to feel that the time has come to … have a meeting and dialogue again once more without the sort of tension that we had in Vienna on this.”
When OPEC last met in the Austrian capital in December, it was bitterly divided and refused to cut output. The next ordinary meeting is scheduled for June 2.
Kachikwu said most OPEC members were watching their economies “being shattered,” and something had to give.
“We need to… see how we can balance the need to protect our market share with the need for the survival of the business itself, and survival of the countries.”
The market’s reaction:
For traders who have developed a Pavlovian “buy” response to government pronouncements over the past few decades, this kind of dismissal is a sign that a different, more cynical and, yes, realistic attitude may be taking hold. Now let’s see how the markets react when the Fed announces lower interest rates and expanded QE.