Under the Radar: OPEC's False Hope

While oil prices rallied on the news that OPEC will slash crude production by 1.5 million barrels per day (bpd) in January, the future and clout of the cartel has never been more in doubt.

The production cut, formalized at Friday's gathering of OPEC ministers in Cairo, took nearly two months to sell to its own members. That OPEC made the cut contingent on support from nonmembers, such as Norway, Russia and Mexico, further shows the growing helplessness of the cartel in controlling world energy prices.

"OPEC is desperate to secure output cuts from major non-OPEC producers because it does not want to lose market share if it cuts its own output in January," notes Leo Drollas of London's Centre for Global Energy Studies. ...