Possible emergency meeting OPEC

An article out yesterday in the FT reports that Ms Alison-Madueke (president of Opec ) is considering calling an "extraordinary meeting of Opec in the next six weeks or so” if the oil price slips future.

http://www.ft.com/cms/s/0/669d962a-bb62-11e4-a31f-00144feab7de.html#ixzz3SfZOydTV

Also as per one of my previous posts

http://www.ft.com/intl/cms/s/0/d51a3d08-aa...l#axzz3QpfCtn8c

"Restructuring advisers are now watching for banks’ twice yearly “borrowing base” determinations for credit facilities, which happen in March and April. Borrowing bases are determined by the value of oil reserves and the fall in prices could reduce lending capacity on credit facilities."

So escalating talk of an emergency meeting of OPEC and falling bond prices due to falling borrowing bases on the value of US reserves might up tick the oil price in March or April of this year.

But as mentioned before it may worth taking note of this statement from the article as well.

"But falling bond prices may not prove to be enough to push companies into comprehensive restructurings. The flood of refinancings pushed most maturities to 2017 or beyond and “covenant-light” bonds are more tolerant of poor financial performance."

So my guess is a small up tick in the oil price between March and April this year, then a reversal as the Saudis quash the other OPEC nations and a longer term drift sideways as falling world GDP bites and maturities in bond refinancings and hedging positions run their courses through to late 2016 when the oil price will start to rebound sharply as the bond bubble in US shale oil finally bursts as financing arrangements and hedge positions finally begin to expire. This time around the very existence of OPEC might also be threatened, I suppose we will see in the coming months.

And on a side note Azerbaijan was forced to devalue their currency the manat by 33.5% a few days ago due to the falling oil price, a move that might threaten banks in that country.

Eshmun