By Tom Stevenson
The Telegraph - 29 Nov 2014
We normally think of Australia as the “lucky country” but that label is surely
better applied to the US today.
You could hardly envisage a more benign backdrop for its economy and stock
market than the current environment of tumbling energy prices, low
inflation, narrowing deficits, competitive industry, a popular currency and
consequently lower-for-longer interest rates.
The frantic shuttle diplomacy in the run up to last week’s Opec summit in
Vienna illustrated the pain being felt by the world’s less favoured nations
– those like Venezuela and Russia which simply can’t balance the books at a
$75 oil price. The meeting showed how difficult it can be to persuade
individual countries, even members of a supposedly co-operative cartel like
Opec, to work together if doing so runs counter to their own self-interest.
It may be beneficial to Opec as a whole to curb production in the face of
surging US shale oil output and flagging global energy demand, but
individual countries may quite rationally decide it is better to keep the
oil flowing to protect their market share.
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