Oil prices to recover next year, whatever OPEC targets

We, and we suspect many others, are still trying to work out exactly what OPEC decided at Friday’s meeting. Usually reliable sources have reported that OPEC has agreed to raise its output target from 30m to 31.5m barrels per day (bpd). In the event, though, OPEC’s Secretary-General has simply said that the group is “effectively maintaining its current output ceiling”. Crucially, this is still consistent with an increase in the ceiling (the key word is “effectively”), because of the need to accommodate up to 1m bpd of oil from Indonesia which is rejoining the group.