The Organization of the Petroleum Exporting Countries (OPEC) may no longer possess the market-defining power it once held in controlling global oil prices. Patrick De Haan, Head of Petroleum Analysis at GasBuddy, shared this view on CNBC’s Fast Money. De Haan highlighted the challenges faced by OPEC in sustaining higher oil prices amid a rapidly evolving global energy landscape.
De Haan mentioned that OPEC’s importance seems to have decreased. They are constantly dealing with low oil prices, he said, referring to West Texas Intermediate (WTI) crude oil, which has had a hard time going above $70 per barrel. “WTI is around $70 per barrel today and is really having trouble rising beyond that,” he added.
He also talked about the uncertainty around OPEC’s plans for oil production, especially their idea to increase output in April 2025. However, he suggested that this date might be delayed even more. “It wouldn’t be surprising if they keep pushing that to July or possibly until the end of 2025,” De Haan said, emphasizing the unpredictability of OPEC’s decisions.
De Haan said that the next year would be especially tough for the upstream sector, which deals with finding and producing oil, more so than the downstream sector, which handles refining and delivering oil.
“I believe the upstream sector will face more difficulties next year compared to the downstream,” he noted.
OPEC’s power to control global oil markets by adjusting production together has been weakened a lot. This is because of the growth of other energy sources, more money being put into renewable energy, and the rise of oil producers outside OPEC, like the United States. The U.S., with its big increase in shale oil production, has made it harder for OPEC to keep oil prices stable, reducing its strong position in the market.
