ON THE LIGHTER SIDE: Possible OPEC Meeting Outcomes

by DownstreamToday Staff

Delegates from the member countries of Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna this Friday to decide their production policy for the next six months. At their last meeting in November 2014, they thwarted efforts to cut production amid declining crude oil prices.

Although we’ll have to wait until Friday for OPEC to reveal its plans for the next half-year, one Dallas-based oil and gas industry prognosticator offers four possible outcomes. Courtesy of Dennis Cassidy, managing director with the global multi-industry consulting firm AlixPartners, here are four (admittedly tongue-in-cheek) predictions of what could emerge from Friday’s meeting in Vienna:

Outcome 1: “Happy Days Are Here Again!”

4,000 frackers vote to join OPEC (which renames itself “FROPEC”), everybody cuts production, Adam Smith’s principals are turned on their head and U.S. antitrust law is repealed.

Likelihood: When swine begin taking aviation classes

Outcome 2: “To Russia, With Love”

OPEC’s recent meetings with Russia pay off for both sides, Russia joins OPEC, which becomes the Organization of Putin’s Exporting Countries, and Moscow draws up plans to “annex” Texas.

Likelihood: Don’t bet your dacha on it

Outcome 3: “No News Is Bad News”

The status quo continues and, despite some additional ups and downs in price, an equilibrium price – likely lower than today’s – emerges.

Likelihood: Don’t expect any odds on this bet

Outcome 4: “Family Feud”

OPEC members irritate one another to the point that it becomes “every potentate for himself,” overall production gets cranked up and prices collapse.

Likelihood: Possible

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