UAE Defection Could Be the End of the 'OPEC Put' | Presented by CME Group

The OPEC put, which refers to a common belief that OPEC and OPEC plus would reduce production to keep oil prices from dropping too low, has weakened considerably now that the UAE has left the group. OPEC and the broader OPEC plus alliance with Russia and others has historically acted like a price support mechanism. When crude prices slump due to over supply or weak demand, the group agrees on output cuts, removing barrels from the market to stabilize or lift prices.This creates an implicit put option for oi ...