There's only so much that OPEC and its oil-producing allies can actually do in a world filled with 'factors beyond their control,' Citi's Global Head of Commodities Research Ed Morse told CNBC.
in order to stabilize oil prices that had plunged from a high of $114 a barrel in June 2014 to a low of around $26 a barrel in early 2016, due to rising supply and lackluster demand.
He said price stability was being affected by factors including poor governance in key producing countries in Latin America and North and West Africa and the increased use of sanctions by the U.S. as it becomes an oil-producing giant itself. "The factors are all beyond OPEC's control," Morse noted.The strategy to restrict supply by OPEC+, which aimed collectively to cut production by around 1.
U.S. shale is the joker in the pack for OPEC and its allies. While producers in the U.S. were also badly hit with the price plunge, many have re-ignited production as OPEC+'s strategy to curb supply helped boost prices. Citi's Morse noted that the "most significant change" in oil market dynamics has been the impact of unconventional shale oil, adding OPEC+ countries hoped for the so-called "shale revolution" to end.
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