Amid perennial hopes that an output freeze might boost prices in time to rescue over-levered producers and their investors/speculators, the reality is that with so many countries desperate for cash, output agreements are hard to reach. Even where they are, cheating is a long established tradition. And a freeze at record output levels amid falling world demand, is unlikely to buoy prices for long.
While oil prices have jumped more than 10 percent since early August amid speculation that Saudi Arabia and Russia can marshal a production freeze, their actions point in a different direction. Riyadh is pumping the most crude on record, while Russian oil output climbed above 11 million barrels a day for the first time since at least 1991, according to data published on the website of Energy Ministry’s CDU-TEK unit for start of September. See Biggest oil traders see another year of pain as glut persists. Here is a direct video link.
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