Judging from today’s sharp reaction, the oil market is surprised by OPEC’s decision not to reduce its production ceiling in order to curtail the accelerated price decline which now totals 25% for the year. It shouldn’t be. OPEC has a history of opting for strategic rather than tactical decisions; and, this time around, it may have done so from a position of caution rather than overwhelming strength. OPEC’s tactical decision would have been to cut its output ceiling as a means of limiting supply to the world energy market and, thus, boosting prices. But the impact of such a cut would have been less than in the past ... (full story)