OPEC Options

OPEC and Russia recently extended a production cap until 3/20. However, OPEC’s share of global production is 39.2%, down from 42.2%, while US share is 14.5%, up from 10.9%. To date, most of the decline has resulted from sharp involuntary production declines in Venezuela and Iran. If demand doesn’t soon rise, OPEC and Russia will have to meaningfully cut their production, further helping US producers, or see crude prices fall.