The agreement by OPEC and several non-OPEC members to cut crude oil production by a total of 1.8 million barrels a day (MMb/d), which caused a rise in crude prices, kicked in on January 1. Now, more than three weeks in, many in the market remain skeptical that the deal will hold, and are on the lookout for the slightest hint that parties to the agreement may be—for lack of a kinder word—cheating. In today’s blog, “Won’t Get Fooled Again—Monitoring Compliance With The OPEC/NOPEC Deal To Cut Production,” we recap the agreement’s terms, examine how participating producers might try to skirt the rules, and discuss ways to check that everyone is acting on the up and up.
Much of the 17% run-up in crude oil prices since September 2016 is attributed to the hope (then the fact) that OPEC, Russia and a few other crude producers that are not part of OPEC would agree to significantly reduce their oil output in the hope of tightening the international supply/demand balance and boost crude prices. As we said in Is This The Real Life? Is This Just Fantasy?, OPEC’s 13 member countries on November 30 (2016) agreed to reduce their output (from October 2016 levels) by 1.2 MMb/d starting on January 1 (2017). Ten days later, on December 10, 11 non-OPEC (NOPEC) countries (including Russia and Mexico) joined in, saying they would collectively cut their production by another 558 thousand barrels a day (Mb/d), also effective on New Year’s Day. The OPEC/NOPEC commitments will run for at least six months, and may be renewed for additional half-year periods after that—all with the hope of maintaining oil prices at levels that work to all producers’ advantage.
Now, all eyes are on these OPEC/NOPEC producers to see if they do, in fact, reduce their production as promised, and to check for any rule-bending by deal participants who may be tempted to make a few extra bucks (or, more accurately, a few riyals or rubles or pesos) by producing some extra crude they can sell at early 2017’s propped-up prices. Judging from previous experience with such accords, the temptation of higher prices is difficult to resist for countries that are dependent on oil exports for much of their income.
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About the song
“Won’t Get Fooled Again” was written by Pete Townshend and appears as the fourth song on side two of The Who’s fifth studio album, Who’s Next. Townshend originally wrote the song as a closing number for his unfinished rock opera, Lifehouse. The lyric at the end of the song, “Meet the new boss, same as the old boss,” was inspired by an incident at Woodstock where Townshend chased Abbie Hoffman off the stage for grabbing a microphone and preaching his agenda to the crowd during a break in The Who’s performance. On the song, Townshend played a 1959 Gretsch 6120 guitar (given to him by Joe Walsh) through a Fender Bandmaster amp. (We guess you could ask Jimmy Page about the magic of 1959 American guitars that had previously been owned by Walsh — the 1959 Sunburst Gibson Les Paul that Page that used in Led Zeppelin was bought from Walsh.) Townshend would use that combination of guitar and amp for many future Who recordings. Released as a single in June 1971, “Won’t Get Fooled Again” went to #15 on the Billboard Hot 100 Singles chart. It has been used in many television shows and motion pictures. On a sad note, it was the last song drummer Keith Moon played live with the band before his untimely passing in September 1978. Personnel on the record were: Roger Daltry (lead vocals, scream), Pete Townshend (guitars, synthesizer, organ, backing vocals), John Entwistle (bass) and Keith Moon (drums, percussion).
Who’s Next was recorded between April and June 1971 at Olympic Studios in London and on The Rolling Stones Mobile Studio outside of Stargroves, Mick Jagger’s manor home in East Woodhay, England. Production was handled by Glyn Johns and The Who. The front album photo shot by Ethan Russell was an irreverent nod to the monolith used in the 1968 motion picture, 2001: A Space Odyssey. The album was released in August 1971 and went to #4 on the Billboard 200 Albums chart. It has been certified 3X platinum by the Recording Industry Association of America. Three singles were released from the LP.
The Who are an English rock band formed in London in 1962 as The Detours. Their classic lineup from 1964-78 was Roger Daltry, Pete Townshend, John Entwistle and Keith Moon. The Who have sold more than 100 million records worldwide. They have released 12 studio albums, 16 live albums, 27 compilation albums, four soundtrack albums, four EPs, and 58 singles. They have a Grammy Lifetime Achievement Award and are members of the Rock and Roll Hall of Fame and the UK Music Hall of Fame. Eight members have passed through the group since its formation. Founding member Keith Moon died in 1978 and John Entwistle died in 2002. Roger Daltry and Pete Townshend continue with various musicians to record and tour as The Who.
