The energy market is again in the spotlight after OPEC and participating non-OPEC oil producers reached the highest ever compliance level with their output cut agreement.
Oil traders have turned bullish on the commodity amid hopes of more upside in the coming months Such is the optimism about oil that leading crude producers, at an OPEC-led committee meeting at Vienna on Sep 22, did not feel the immediate need to go for extension of the production cut deal beyond March 2018. Instead they will wait at least until January to make any further decisions. This showed confidence that the crude glut will likely be cleared within the first quarter of 2018.
Output Cut Maintained in Last OPEC Meeting
On Nov 30, 2016, OPEC signed a landmark deal to curb crude production by 1.2 million barrels per day. Following in the footsteps of the cartel, in early December last year, non-OPEC players headed by Russia also decided to lower oil output by 558,000 barrels per day. Hence, collectively they decided to curb crude production by 1.8 million barrels each day.
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