2017 So FarPosted Apr 01, 2017
The beginning and middle of 2017 for oil is still uncertain. OPEC committed to an oil production cut for the first time in eight years that changed the outlook of oil production we are seeing now and possibly in the future. OPEC met about the cuts on November 30th then with non-OPEC members a week later and their next meeting is on May 25th to reconvene and discusses their next steps. The intended cut in production is on target but the majority of OPEC and non-OPEC countries are below target on their agreed upon cuts, some of which even increased production. Saudi Arabia has shouldered the majority of the difference of the projection of the production cut to keep things on par, almost doubling what they originally promised to cut. Angola has also cut more than they have originally promised but due to the rest of OPEC nations coming in below expectation it is unknown how long Saudi Arabia can hold out bearing the brunt.
The production cut is the first time they've become significantly unified in the last decade to try to change the alter the price of oil but response is underwhelming and if they don't renew their agreement of the cut this summer oil will tumble back down just as U.S. shale ramps back up. All agree that there is too much oil on the market for the current demand but it hasn't stopped speculation or overpricing. Despite the production cut oil price is relatively unchanged for now while the oil glut remains. Once speculation and political unrest recedes we may see oil drop again this summer before rebounding in the fall, assuming the production cut stays in place.