On 30 November, OPEC members decided to cut a total of 1.2m bbl/day of crude oil output from 1 January 2017, for the first time in eight years. The move is set to last six months in a bid to bolster prices as the ever-growing global oversupply has taken its toll on producers’ revenues and investment projects. Some non-OPEC countries also agreed to cut as much as 600,000 bbl/day.
In January 2017, OPEC countries were already keeping their end of the bargain, with a committee put in place to verify compliance. However, their efforts might be countered as Libya and Nigeria are restarting production and rising prices are expected to trigger a higher US shale output.
In the face of a mounting oil production, ICIS looks at the way the output cuts agreement has affected oil prices so far and the 2017 outlook.
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