(BLOOMBERG) — It may be too soon to write OPEC's obituary, but the oil producer club appears in urgent need of late-life care. It shows little understanding of where it is, how it got there or where it's going. While it still manages to collect new members here and there, its core group looks more fragile than at any point in nearly 30 years.
The historic output agreements, put together so painstakingly last year, are failing. Nearly 12 months of shuttle diplomacy culminated in two deals that would see 22 countries cut production by nearly 1.8 million barrels a day. Implementation has been better than for any previous output cut, with compliance put at 106 percent in May. A resounding success? Hardly.
We're now in the final month of those deals and oil prices are lower than when they were agreed. Not only have producers sacrificed volume, but they earn less for each barrel they do produce.
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