It was exactly four years ago this month that OPEC surprised global energy markets by announcing it would end its long standing role as a swing producer of crude oil, a role that supported oil prices in periods of oversupply. This announcement set off a collapse of global oil prices, with WTI crude oil plunging 52% in just six months, from $105 per barrel in mid-2014 to $50 by January 2015, before ultimately bottoming near $30 in early 2016. OPEC’s purported intention was to hit American shale oil producers, whose vast production of oil from unconventional fields had become a contributing factor to global oversupply.
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Author: Michael Eisenband, FTI Consulting