The way oil prices are going seems so stupid. When OPEC reduces its output, the prices continue to fall, but when fighting breaks out between Israel and Gaza, both of whom don't produce oil and have no meaningful oil reserves, the price jumps.
not stupid at all. OPEC cutting active supply simply adds to the cushion of shut-in supply, so the cuts don't really impact overall supply. But the conflict in Israel and Gaza could spill over to the oil producing regions of the middle east and thus destroy both active and shut-in supply.