OPEC detects ‘high compliance’ with oil cut deal

Date:

OPEC said Tuesday oil producers have kept their promise to cut output in accordance with a landmark deal designed to lift petroleum prices.

Thank you for reading this post, don't forget to subscribe!

As a result, prices rose in February as last year’s accord between OPEC members and some non-members gained traction, the Organisation of the Petroleum Exporting Countries said in its monthly oil report.

The oil price recovery was, however, under threat from fresh supply as high-cost producers in the United States started drilling again, encouraged by the price upswing, as well as from rising Canadian production.
An OPEC oil price reference basket rose by about two percent to an average of $53.37 in February, the organisation said.

“High compliance with supply adjustments by OPEC and some non-OPEC producers supported gains,” it said.

In December, OPEC agreed with 11 non-members, including Russia, to cut output in the first half of this year to push prices higher.

– Placing bets –
Looking at the oil futures market, a key gauge of pent-up demand, OPEC said a record number of investors were placing wagers on price increases.

“Bets on crude oil prices rising have hit a new record high for the third month in a row, giving additional support to oil prices,” OPEC said.

“Investor optimism over the effectiveness of the production adjustments encouraged record bets on a sustained rally,” it said, adding however that “growing US output and stubbornly high stockpiles kept price gains in check and contained prices within a tight range”.

The oil price has seen a strong recovery from 2016 lows and is currently more than 30 percent up from levels a year ago.

But the rally has been stuttering in recent weeks as a cocktail of threats to the recovery has emerged.

Investors are nervous because of a surprisingly big jump in US stockpiles reported last week, increased US shale production and concerns about implementation of the OPEC-led deal to cut output.

On Tuesday, WTI oil stood at $48.59 per barrel and Brent at $51.77. Both contracts were up on the day, but between four and five percent lower than three months ago.

– Demand also rises –
OPEC does not predict oil prices, but the organisation did revise up its supply outlook for this year in an acknowledgement that fresh drilling in the US was having an impact on efforts to reduce a glut in the market.

“An improving outlook for Canadian oil sands and US supply were the main contributors to the revision” it said.

In February, “growing US output and stubbornly high stockpiles kept price gains in check and contained prices within a tight range”, it noted.

Citing a survey by Baker Hughes, an oil firm, OPEC said the number of American oil rigs had risen for seven consecutive weeks and was now 55 percent higher than a year ago.

Oil investors have been wondering whether OPEC might extend its current output deal to counter rising production elsewhere, but the report did not address that question.

Meanwhile, rising global demand for oil will help rebalance the market, OPEC projections showed.

The cartel boosted its 2017 outlook for demand growth to 1.26 million barrels per day, an increase of 70,000 barrels a day from last month’s outlook.

“The upward adjustments were due to more optimistic expectations for oil demand in OECD Europe, as well as Asia Pacific,” OPEC said.

OPEC’s 13 member countries together produce one-third of the world’s oil.

Peter Okafor
Peter Okaforhttp://Naija247news.com
Peter Okafor Financial Journalist | Editor | Contributor Overview: Peter Okafor is a seasoned Financial Journalist, astute Editor, and valued Contributor at Naija247news Media Group. With an unwavering passion for dissecting complex financial landscapes, Peter has become a trusted name in delivering incisive and insightful coverage of economic events, market trends, and corporate dynamics. Professional Journey Peter's journey in financial journalism has been marked by a commitment to excellence. Joining the ranks of Naija247news, he has consistently demonstrated a keen understanding of the intricate interplay between finance and the global socio-economic fabric. Expertise: Specializing in financial markets, economic analyses, and business developments, Peter Okafor has honed his expertise over the years. His ability to unravel intricate financial narratives and present them in a comprehensible manner sets him apart in the world of financial journalism. Contributions As an Editor and Contributor, Peter has played a pivotal role in shaping the narrative of Naija247news. His contributions extend to thought-provoking articles, in-depth market analyses, and coverage of key events that impact the financial landscape. Educational Background: Peter holds a degree in Journalism, complemented by specialized courses in Finance and Business Reporting. His educational foundation has provided him with the tools to navigate the intricate world of financial journalism. Innovation and Adaptability: In an era of evolving media landscapes, Peter Okafor exemplifies innovation and adaptability. Leveraging digital platforms and emerging technologies, he ensures that financial insights reach a diverse audience, fostering financial literacy and awareness. Awards and Recognition: Peter's commitment to journalistic excellence has not gone unnoticed. He has been the recipient of several awards, recognizing his outstanding contributions to the field of financial journalism. Vision for the Future: Looking ahead, Peter Okafor envisions a future where financial journalism continues to empower individuals, shape economic policies, and drive positive change. His dedication to staying at the forefront of financial news underscores his commitment to this vision. Connect with Peter Okafor: - LinkedIn: [Peter Okafor](#) - Twitter: [@PeterOkafor_N247](#) In the dynamic realm of financial journalism, Peter Okafor stands as a stalwart, combining experience, expertise, and a forward-looking vision to illuminate the path of financial understanding for a global audience.

Share post:

Subscribe

Popular

More like this
Related

Access Holdings to pay N1.80 as final dividend to shareholder

March 28, 2024. Azonuchechi Chukwu. Access Holdings has revealed plans to...

Police gun down two notorious bandits in Benue

March 28, 2024. Azonuchechi Chukwu. Men of Operation Zenda, a Joint...

Army declares eight wanted in connection with the k!lling of its officers in Okuama

March 28, 2024. Azonuchechi Chukwu. The Nigerian Army has declared eight...

Naira Appreciates Against Dollar at the NAFEM Window

March 28, 2024. Azonuchechi Chukwu. The Naira’s euphoric appreciation against the...
Social Media Auto Publish Powered By : XYZScripts.com

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading