OPEC move indicates a major shift in the sands

If, in a normal market, the supply of a commodity is increased, one would usually expect the unit price of that same commodity to fall. And so, when OPEC announced at its most recent meeting a production hike of one million barrels per day – in excess of 1% of current supply – economic logic would have assumed that the impact on pricing would be negative. More oil should come at a lower price.

But just a few days after the OPEC agreement, oil is still pricing at or around the level it achieved before the meeting.