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.
