Much is made of the oil cartel OPEC, the Organisation of Petroleum Exporting Countries, in the news media. Foolish contributors comment on them too, occasionally. After oil prices first plunged in 2014 I opined that it would put monstrous pressure on the budgets of OPEC nations, which are heavily reliant on their oil exports.

Reportedly it did, but after wasting two years deciding on the shape of the conference table, the OPEC nations have yet to actually implement a cut to production. Waiting for these nations to reduce production – so that you can benefit from a jump in the price of your Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) shares – is not smart.

I initially thought that the pressure of low oil prices would convince OPEC of the necessity of cutting production. It did, but that idea overlooked the complexities of getting 14 different countries to sit down and agree to something – not very likely!

Every month for the past two years we’ve seen some new story describing the OPEC negotiations. The Saudis refuse to cut production. Sanctions might be lifted against Iran. Suddenly the Saudis want to cut, but no-one else will. Iran starts producing oil again. Russia will derail the oil deal. Iran will derail the oil deal. On top of that, no-one really believes the nations involved will commit to cutting their output anyway.

And at the end of the day – the cartel only controls a third of the world’s oil production.

Forget about OPEC!

A rapid increase in oil/gas supply caused prices to fall in 2014. Demand either needs to pick up, or production needs to fall in order for prices to rise. Businesses probably need to go broke. At today’s prices, most companies aren’t making a lot of money. There’s virtually zero investment in exploration and production growth, which will catch up when current wells start running dry – although that could be some time away.

The stage is set for a rebound, but it won’t be caused by OPEC. Readers looking to get some hints on when oil prices might rise could spend their time more productively by keeping track of International Energy Agency (IEA) oil production reports and other things like the US rig count. Even better, research which Australian company has the best chance of success, because you have a lot of choice:

Oil Search Limited (ASX: OSH), Origin Energy Ltd (ASX: ORG), Beach Energy Ltd (ASX: BPT), Cooper Energy Ltd (ASX: COE), Senex Energy Ltd (ASX: SXY) to name a few, plus a couple of productive minnows like Empire Oil & Gas NL (ASX: EGO).

Figuring out which of those has the highest quality assets is a much better use of your time than wondering about OPEC.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.