HAVE YOU HUGGED A FRACKER TODAY? OPEC’s Coffers Are Drying Up.

OPEC’s members brought in less cash from selling oil in 2016 than in any of the past dozen years. That grim reality comes to us courtesy of the U.S. Energy Information Administration. . . .

That 15 percent year-on-year decline is a dramatic example of the fiscal pain these petrostate regimes are enduring as a result of the collapse in crude prices. Those low prices come to us courtesy of American shale producers, whose output contributed to a global glut that brought prices from their $100+ per barrel levels down to the $50 range they occupy today.

Those lost export revenues are why OPEC, along with a group of 11 other petrostate producers (including Russia), have agreed at last to reduce their collective output in an attempt to rebalance the market. But a look at the latest data shows that that rebalancing is going to take a lot more time than was initially envisioned, and Riyadh and Moscow both think they’ll be constraining production through March of next year.

In the meantime, U.S. producers are seeing their own output rise and the numbers in their balance books turn black once again.

This is huge, and isn’t getting enough attention. It’s the biggest power realignment since the end of the Cold War.