Some senior western oil executives believe Opec's dilemma is compounded by a lack of clear information on the state of the market and the impact of possible structural changes in consumer attitudes towards holding stocks. Then Opec will have to put the brakes on because we don't know where the floor is. One theory says that if stocks in the system are now structurally lower because of a fundamental shift in attitudes in the market, then any over supply that might emerge would not be absorbed initially by a build up of inventories, but would pass through directly into the markets and have an immediate and possibly dramatic effect on prices. If Opec acts too early to cut supplies, however, it could have the effect of driving short term prices even higher, thus adding even more volatility to an already nervous market. That in turn could exacerbate any eventual decline as analysts note that markets have a tendency to overshoot both on the way up and the way down.
Psychology is also likely to play a part in the process.
Events could also prove to be a decisive driver. If Opec is successful over the next few months in engineering a soft landing for oil prices within its agreed price band, it will still have to contend with longer term anomalies between its aspirations and the commercial realities in the non Opec world. When life is too easy sometimes you have to pay for it later.