OPEC non-OPEC Deal: A Month Later

One month after the historic deal between OPEC and non-OPEC countries has passed, with the first report being published by OPEC on Wednesday January 18th. 

Oil production of OPEC countries fell in December 2016 by 220,900 barrels per day to 33.085 million barrels per day, with organisations estimating smaller surpluses in 2017. 

In its monthly report, OPEC said that a continued normalisation of monetary policies, indicating improving economic conditions, together with the recent historic cooperation between Opec and non-Opec producers, should help to bring needed stability to the oil market, hence further supporting the world economy. 

Non-Opec production is projected to grow by 0.12 million bpd, down from its original expectation to rise 0.18 million bpd. For some non-OPEC countries committment to supply adjustment are somewhat challenging, however initial reports show positive signs of compliance with pledged productions adjustments. 

Downward revisions to Russia, Kazakhstan, China, Congo and Norway, were partially offset an upward adjustment to US production, the Opec report said, indicating a rise supplies from the US due to higher prices. 

“Fading supply glut is a good news for the industry, but we need a lot more progress what they have to rebalance the market in terms of compliance,” said Naeem Aslam, chief market analyst with Think Markets.
The February report is expected to give more clarity on the quantum of cuts from each producer.

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