If nothing else, they proved they could barrel ahead as a team. 

Just days after Brent crude oil prices slipped under $74 per barrel, erasing all the gains the benchmark had seen so far this year, the member nations of oil-pumping cartel OPEC+ agreed to delay a production increase for two months. The move, which could or should prop up prices, comes just as unity within OPEC+ begins to crack.

Crude Awakenings

As per usual, oil prices are simply a reflection of broader macroeconomic conditions. With China slogging through a long post-pandemic rebound and many fearing a notable slowdown in the US economy, it’s no wonder oil prices have started to fall. But that’s all priced in — which is why the cartel has been curbing production and supply for over a year now. Or, at least, why it agreed to curb production and supply for over a year now. In a statement Thursday, the group confirmed suspicions that member nations Iraq and Kazakhstan have been pumping more oil this year than the group has agreed to; apparently, not everyone is on board with the higher-prices-for-lower-market share trade-off. 

In fact, OPEC+ has seen its global market share sink to all-time lows, according to an April report from the International Energy Agency, as rivals in the United States, Canada, Brazil, and Guyana take hold. The group had previously planned to kickstart production increases in October to regain market share. But by delaying the increase to Dec. 1, some think the group is merely creating future problems for itself — possibly without even seeing benefits in the present:

• Manish Raj, managing director of Velandera Energy Partners, told MarketWatch Thursday that the cartel’s production delay merely “kicks the can down the road — without addressing the softening of demand.” He added that “it is just a matter of time when OPEC will open the floodgates to regain market share,” though he cautioned that doing so in December would be “just at the wrong time, when demand goes seasonally low.”
• Meanwhile, Helima Croft, head of commodities research at RBC Capital Markets, told the Financial Times that the group may well institute another delay in December. “It’s another ‘to be determined’ … It gives them breathing room.”

The announcement didn’t have much immediate impact. Benchmark US crude prices initially jumped 2% on the news before falling again by the end of the day.

Taking Stock: Meanwhile, over in the US, stockpiles are depleting slightly faster than anticipated. On Thursday, the US Energy Information Administration announced that crude oil inventories fell by around 6.9 million barrels to 418 million barrels in the week ending Aug. 30. Analysts surveyed by The Wall Street Journal had expected a decrease of just 700,000 barrels.

It’s the Ticketmaster takedown (England’s version). 

This week, tickets for the reunion tour of ‘90s rock band Oasis went on sale in the UK, and some fans found that while they were waiting in the queue, the prices had quietly crept up from £135 ($177) to £350 ($460). On Thursday, the UK’s Competition and Markets Authority (CMA) announced it was launching a probe into Ticketmaster and its use of “dynamic pricing.”

The Dynamic Duo

Dynamic pricing — when companies raise prices in response to high demand — has become a pretty familiar if frustrating phenomenon for consumers. The classic example would be Uber: Try catching a ride after a major football game, and you’ll notice the fares are just a scooch higher than usual. Airlines also use dynamic pricing for popular flying days.

Exactly which sectors are able to deploy dynamic pricing without stoking backlash is a tricky cultural issue, however. When media outlets reported in February that Wendy’s was gearing up to use dynamic pricing at its restaurants, the chain quickly put out a statement denying the reports to counter the swift consumer backlash. It seems that with the Oasis debacle, Ticketmaster may have just about fallen off the dynamic pricing tightrope:

• A key issue at stake in the CMA’s investigation is whether ticket buyers were aware that the price could change after they got in the digital queue for tickets. On top of that, there’s an issue of whether, once they got through, Ticketmaster pressured them to buy tickets in a certain time frame.
• This isn’t Ticketmaster’s first brush with an antitrust agency. In May, the US Department of Justice sued to break up Ticketmaster’s parent company, Live Nation, accusing it of monopolistic practices.

Bad Blood: Oasis put out a statement blaming Ticketmaster for the fiasco, saying they “at no time had any awareness that dynamic pricing was going to be used.” They’re not the first artists to throw Ticketmaster under the bus. Ahead of her Eras Tour in 2022, which was preceded by chaotic Ticketmaster sales, Taylor Swift put out a statement saying the company had assured her it would be able to handle the demand.

Even in the age of ride-shares, New York’s yellow cabs are iconic symbols of the city. But their challenges go beyond Uber and apps today. 

Just one company, American Transit Insurance Company (ATIC), insures over 60% of 117,000 taxis and for-hire vehicles. And it’s insolvent. New York’s Department of Financial Services (DFS) excoriated the company in a report that said it should consider a sale or other drastic “immediate action” to stave off a failure that would cause transit chaos.

Too Big to Hail

A family firm run by Ralph Bisceglia, ATIC carved out its sizable market share by offering plans at a discount relative to competitors. Bloomberg reported earlier this week that industry observers — and taxi drivers — were alarmed when ATIC posted a jaw-dropping $700 million second-quarter loss.

“To see this kind of loss of this size — there are few precedents,” Tim Zawacki, an insurance analyst at S&P Global Market Intelligence, told the outlet. “If this company is going to be unable to continue business, there’s going to be significant fallout in terms of who is going to insure all of these drivers.” The ripple effects could be felt across America’s largest metropolis:

• ATIC has had deficient reserves for decades, but matters have gotten worse as larger claim sizes have rolled in, leaving it teetering on the brink. “A collapse of ATIC would leave tens of thousands of livery drivers uninsured and without a source of income,” the DFS said in an April letter to ATIC, published with its report.
• In April, the DFS told ATIC it should “explore all possible options to obtain funding,” including a sale, in order to avert a catastrophic transit pileup. In the event of a failure, tens of thousands of taxis, limos, Ubers, and Lyfts would suddenly be uninsured, and other insurers would struggle to handle the massive business. Also, premiums would likely go up, crunching the whole industry.

Give it Back: The DFS said ATIC should claw back $22 million paid out to affiliates and company officers in a May letter that was disclosed in the report.