Last Friday's Iraqi concession to UN demands will almost certainly pave the way to its re-entry into Opec and supply pressures.
However, this may be the darkest hour before the dawn. Late yesterday Kuwait formally asked for an emergency Opec meeting to stem the sliding crude price, which at one stage fell below dollars 14 barrel yesterday.
The Kuwait intervention is highly significant as it has been one of the least willing to cut production quotas.
An early Iraqi return could also be a catalyst rather than hindrance to finding a lasting solution to Opec overproduction. Members can no longer duck the question of reallocating their quotas to the pre- Gulf war status.
That said, investors should remain cautious. The obvious losers while oil price remains weak are the exploration companies with high debts and operating costs, such as Lasmo.
However, Enterprise, with an above-average yield and a huge surge in production coming through next year looks good value for the long term.
Moreover, cheaper crude gives integrated groups like BP and Shell some shelter as it improves refining margins. But the latter, with a higher exposure downstream, is a safer bet.Reuse content