OPEC may have to cut production now to get crude prices back to a level which will allow its members to get back the tens of billions of dollars they lost as the price of commodity moved under $70.
But, holding back supply is not their only hole card, at least not long-term. The supply of oil in the ground is shrinking and shrinking much faster than almost anyone expected.
It will not be long before OPEC cannot increase production because finding new fields is just too difficult
According to the FT, "Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows." Annual oil availability could drop as much as 9% a year. That is unless large oil companies up exploration, an investment made more difficult by low crude prices.
The International Energy Agency points to the usual suspects as the countries that will drive up demand–India and China.
Over the long haul, oil prices are going up. Within a few years, OPEC will not have to cut production down from the pace that it takes crude out of the ground. There will simply be a lot less to take.
Douglas A. McIntyre