OPEC Can’t Get Along, And That’s Good

NEW YORK (TheStreet) -- At the upcoming OPEC meeting in Vienna on June 14, members will have a lot to talk about. Oil prices have been dropping like a stone and not only because of the bad economic numbers coming out of Europe and China. There's been also been dissent among the OPEC members, particularly Saudi Arabia and Iran.

Saudi Arabia has telegraphed earlier last month that they would increase production, trying to blunt the effect of an Iranian boycott still slated to go into effect July 1. As Saudi daily production has eclipsed 10 million barrels a day, other OPEC members have also been able to ramp their production unexpectedly. Libyan supply is again close to historic norms, quickly recovering from its civil war of last year and Iraq has been able to aggressively increase production, now up to 2.5 millions barrels a day. The upside of all of this production has been a monthly OPEC output of 31.8 million barrels a day, far above their stated output quota of 30m barrels a day. For us here in the U.S., including drivers looking for cheap gas, the likely dissent in the upcoming OPEC meetings will be a good thing.

This is all in spite of a decrease in Iranian production, squeezed slowly and inexorably by economic sanctions and European and Asian customers who are avoiding Iranian crude in expectation of a full boycott. ...