Opec ushers in the next market cycle

Opec and partners have cleared the glut—but will keep cutting. The strategy will support prices, but recreate the conditions that brought about the last bust

Forget "lower for longer", with Brent over $77 a barrel, the bottom of the oil-market cycle has passed and sentiment is now shifting. Perceptions of endless oil-supply abundance are fading. Glimmers of a less-fashionable idea—that production will be insufficient to meet future demand—are reappearing. The next phase of the cycle is a price and investment upswing. The seeds of the next downturn are being planted. The speculative money swamping oil futures tells the story. By late April, portfolio managers held 14 long positions for every short one, according to Reuters. No wonder. As it reaches supply-demand equilibrium, the market's tightness leaves it exposed to the kind of geopolitical even