![\"Chavez\"](\"http:\/\/static.businessinsider.com\/image\/4bfa6b3c7f8b9a4449f20800-400-\/chavez.jpg\")
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Oil has recovered from its flash crash last week<\/a>, but it has by now breached key psychological levels.<\/p>\n Moreover, lower prices could counter-intuitively beget increased<\/em> supply as many OPEC members could now be forced to cheat on their production quotas even more so than before in order to support their national budgets:<\/p>\n Hellenic Shipping News:<\/a><\/p>\n According to OPEC’s leading official, now that oil prices have fallen to $68-70 per barell, the first line of defence will be a better compliance. But if OPEC members cheat on exporting volumes when prices are high, things are more difficult when prices falling under the psychological level of $70 per barrel as their revenues are also falling.<\/p>\n At the same time, another problem for OPEC members is that non-OPEC supply is rising in a fast way especially from Russia.<\/p>\n Lower prices could push higher production beyond quotas, which push down prices even further, etc. Could this create a self-reinforcing cycle for the next, say $10, of downward action for oil prices?<\/p>\n There’s probably a limit to this kind of behavior, but some OPEC members aren’t in the best of shape, such as Venezuela. Thus OPEC non-compliance could increase until it gets too obvious, via crashing oil prices, at which point OPEC members would be forced to come back into line with their cartel.<\/p>\n Join the conversation about this story »<\/a><\/p>\n Oil has recovered from its flash crash last week, but it has by now breached key psychological levels. Moreover, lower prices could counter-intuitively beget increased supply as many OPEC members could now be forced to cheat on their production quotas even more so than before in order to support their national budgets: Hellenic Shipping News: […]<\/p>\n","protected":false},"author":6205,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-576337","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/576337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/6205"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=576337"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/576337\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=576337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=576337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=576337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/img><\/a>
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