RPT-COLUMN-OPEC and its allies seek the nirvana of crude oil balance: Russell | Reuters:
The key concept in the wake of the decision to reduce crude oil output by OPEC and its allies is “balance”. It’s something everybody in the market says they want, but they all have different ideas of what it means and how to get there.
Boiled down to the basics, both the Organization of the Petroleum Exporting Countries and the other producers, most notably Russia, are trying to do with the move to cut output by 1.2 million barrels per day (bpd) is achieve their vision of a balanced market.
While what this means is not exactly spelled out in unambiguous terms, it’s assumed to mean that they want an oil price they believe to be “fair” and one that will allow them to meet their fiscal obligations as well as ensuring sufficient incentive for capital spending to maintain future output.
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