OPEC and Non - OPEC Members say cut oil production is beyond expectations

OPEC and Non - OPEC Members say cut oil production is beyond expectations
OPEC and Non - OPEC Members say cut oil production is beyond expectations
Tuesday January 24, 2017

Members and non – members of the OPEC said that have already decreased oil output by 1.5 million barrels per day as part of this year’s output deal, the participating nations have said following the first meeting in Vienna of the committee intended to monitor the deal’s progress.

The minister of the Russian Energy claimed that the deal was a success and all the countries are sticking to the deal and the results are above expectations. Output could be decreased as much as 1.7 million barrels per day by the end of the month. Last year’s deal targets to drop production by almost 1.8 million barrels per day for the first half of 2017.

Saudi Arabia has taken initiative towards this direction and also other countries took part in very important actions stated a government official from Saudi Arabia’s ministry of Energy. Despite the demand which is usually being lower in the first quarter in winter, the actions that were taken by Saudi Arabia and the other countries has impacted the market in a perceptible way and the impacted have been seen in spot prices. Also Saudi Arabia producing just under 10 million barrels per day and there would be substantial drop next month.

Whereas Russian officials say that oil production this month has fallen 11.15 million barrels per day following cuts of about 100,000 barrels per day, an amount which was twice the previously planned amount. Moreover the agreements on oil production cuts have already had positive effect on the market, which has become more stable and predictable.

On the other hand whether that positive effect would allow U.S. shale oil to boost production a government official from Kuwait stated that this was not a concern. There are not worries that production in the U.S. will increase as prices go up because this will be absorbed by an increase in demand.

The output deal committee’s next meeting is scheduled to take place in March.


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