The Fed sends flowers to OPEC

OPEC+ continues to keep oil prices within a 'goldilocks' price range and provide stability in turbulent geopolitical times

The US Federal Reserve published in January an academic paper, Reasons Behind Words: OPEC Narratives and the Oil Market. The paper is the result of rigorous research and analysis by a team of authors who used a model-based approach to analyse all recorded OPEC press releases and mapped them against the fundamentals of oil supply, demand and speculative activity in the oil market. Their main conclusion was that “OPEC communication reduces oil price volatility and prompts market participants to rebalance their positions”. For an organisation that often gets a bad press, this complimentary statement might come as a surprise to many, particularly those who mistakenly take the view that OPEC is a