The crude scheme

Crude producers agreed they’re cutting oil production!!!

This is speculation, most crude producers cannot afford to reduce production, we have the example of Venezuela!!

This measure is a way to inflate crude prices, however the cause/effect will be seen in the next months as other alternative means of energy are now in an advanced stage of development, let’s not forget that US elect President Trump stated that one of the Nations priorities is energy that includes shale oil.
 

Futures rose as much as 2.8 percent after adding 45 percent last year, the biggest annual gain since 2009. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10.

Oil climbed for the first time in three years in 2016 as the Organization of Petroleum Exporting Countries and 11 other nations agreed to cut output starting Jan. 1 in an effort to reduce bloated global inventories. Prices, which eased in late December, are surpassing the peaks reached just after the deal was finalized, as Kuwait and Oman give the first signs the curbs are being implemented.

OPEC member Kuwait has reduced output by 130,000 barrels a day to about 2.75 million a day, Al-Anba newspaper reported, citing Kuwait Oil Co. Chief Executive Officer Jamal Jaafer. Oman is cutting 45,000 barrels a day from 1.01 million, the Oil Ministry’s Director of Marketing Ali Al-Riyami said on Oman TV.

OPEC nations and non-members including Russia and Mexico have agreed to trim output by about 1.8 million barrels a day. Iraq will start implementing cuts by reducing heavy and medium grades, the nation’s Oil Minister Jabbar al-Luaibi told Kuwaiti daily al-Jarida.

A big factor to watch over the coming months will be the response of shale oil to the supply cuts. That policy crushed crude prices and resulted in the shakeout of high-cost producers. For one, the U.S. shale industry sees a strong come back, now analysts expect after Trump takes office the US will continue with more shale production, the U.S. is producing about 700,000 barrels a day less than it was a year ago.

Drillers in the U.S. increased the rig count by two to 525 last week, the highest level since last January, according to data from WorldWatch.

Saudi Arabia has lost market control to Iran, if this strategy continues other Opec and non.Opec members will lose economic independence and face serious economic times.