fxmysia
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At the regular meeting of OPEC (the organization of petroleum exporting countries) on November 30 in Vienna an agreement was reached about a reduction in oil production starting from January 2017.
As of the beginning of 2017 the cartel will reduce oil production in the amount of 1.2 million barrels. In addition, they expect that non-OPEC countries would cut production by 600 thousand barrels per day.
OPEC members were able to overcome their major disagreements, stumping skeptics.
The return of OPEC as a regulator on the market indicates the end of the “pump as much as you can” policy and is supposed to quickly restore the balance of supply and demand on the oil market.
If they can achieve a reduction of 1.8 million barrels per day it will help the market to quickly get rid of oil excess and will raise the price to the level of $50-60.
Skeptics should now pay attention to the fact that non-OPEC member states might not cut production. However, it is worth noting that in countries such as Mexico and Azerbaijan production will fall naturally due to the depletion of the oilfield.
It is also important to note that OPEC’s reduction decision will be in effect until mid-2017.
According to the preliminary estimates, the central importance of the oil price will be in the area of $55 per barrel. Towards the end of 2017 it can move to the level of $60.
As of the beginning of 2017 the cartel will reduce oil production in the amount of 1.2 million barrels. In addition, they expect that non-OPEC countries would cut production by 600 thousand barrels per day.
OPEC members were able to overcome their major disagreements, stumping skeptics.
The return of OPEC as a regulator on the market indicates the end of the “pump as much as you can” policy and is supposed to quickly restore the balance of supply and demand on the oil market.
If they can achieve a reduction of 1.8 million barrels per day it will help the market to quickly get rid of oil excess and will raise the price to the level of $50-60.
Skeptics should now pay attention to the fact that non-OPEC member states might not cut production. However, it is worth noting that in countries such as Mexico and Azerbaijan production will fall naturally due to the depletion of the oilfield.
It is also important to note that OPEC’s reduction decision will be in effect until mid-2017.
According to the preliminary estimates, the central importance of the oil price will be in the area of $55 per barrel. Towards the end of 2017 it can move to the level of $60.
