OPEC AND THE OUTLOOK FOR OIL PRICES

Abstract

Where are the crude prices going? OPEC has certainly made progress toward restoring its own credibility as well as an environment of stable prices, but there are still factors that point to a future of both price volatility and fragility. This paper will examine the supply/demand outlook with an emphasis on intra-OPEC dynamics and cartel policies, and the likely impact on crude prices. As part of the discussion, we will look at the implications of shifts in the Iran/Iraq situation, likely cartel responses, and the effect of the supply balance from the Middle East.