Oil prices have slumped since the summer of 2014 from above $100 a barrel
Oil prices have slumped since the summer of 2014 from above $100 a barrel.
The price rout, due to an oversupply thanks in part to the U. S. shale oil revolution, was accentuated later that year when Saudi Arabia rejected any deal by the Organization of the Petroleum Exporting Countries (OPEC) to cut output and instead fought for market share.
But a historic OPEC agreement struck over three months from September that will reduce production from Jan. 1, marked a return to the 13-country group’s old objective of defending prices.
Oman told some customers it will reduce term allocations by 5 percent in March, but did not say whether the supply reduction would continue after that.
The rise in prices can be seen as “proof of international credibility,” for OPEC and partners, said Igor Yusufov, founder of the Fund Energy investment firm and a former Russian energy minister.
He said the rise, a “ponderable New Yew present” for producers, is propelled by expectations of expectations of oil demand growth.
Analysts at JBC said major forecasters diverge on their specific predictions.
“We see a big variation in demand growth assessments for 2017, ranging from 1.22 million bpd (barrels per day) … to 1.57 million bpd,” they said in a note to clients.
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