The market power of OPEC – and its limitations
Which are the long term objectives OPEC wants to achieve?
Date: Wednesday March 4, 2015
Location: Bryggarsalen, Norrtullsgatan 12 N, Stockholm
Samuel Ciszuk, Senior Advisor, Swedish Energy Agency
- Stephen George, Chief Economist, KBC Advanced Technologies plc, Walton-on-Thames, Surrey, UK
- Øystein Noreng, Professor emeritus, Petroleum Economics and Management, BI Norwegian Business School
Lately the global oil market has undergone a dramatic shift, with increased supply, particularly in the US, and weak demand growth. As a result, oil prices have been more than halved since last summer.
The seminar began with Staffan Riben (Chairman of NOG) giving a brief of what NOG is and welcoming the two speakers, Stephen George and Øystein Noreng, and our moderator Samuel Ciszuk. Samuel then gave a brief introduction to the topic, tying the oil price fall to the geopolitical instability, the changing industry, the European refining crisis and the overall demand situation.
Stephen George was the first speaker out of two. He gave a very interesting presentation around the question What's driving OPEC? Stephen gave the audience some history about the oil price and the driving factors for OPEC. One conclusion that Stephen presented was that OPEC acts on consensus – if the ministers don´t agree, there is no change to the last policy direction. Read Stephen's full presentation here.
Øystein Noreng was concentrating on The OPEC Core New Strategies in the concluding presentation. There are new challenges for OPEC, both on the supply side with US shale oil and other non-conventional oil, as well as on the demand side with competition from electricity and LNG in the transportation sector, energy efficiency and weak economic growth. A part from that North America is almost self-sufficient and Asia is the main market. Øystein gave a long list of new challenges for OPEC which you can read more about in his presentation.