Crude Oil Futures climbed above 50.00 to end the week & have held steady just hours after the U.S. open Monday. This recent hike is backed on increased confidence that OPEC will continue its efforts to curb global production.
Unfortunately, the initial goal to decrease production by 2%, announced roughly 6 months ago, has fallen short with little impact on the per barrel price as it appears not all members are playing by the rules.
Experts state that Iraq exceeded their production ceiling by about 80K barrels per day. Iraq’s choice to ignore OPEC production cuts may leave little incentive for other OPEC members to adhere to future surplus reduction efforts. However, according to OPEC data, Iraq’s peers appear to be turning a blind-eye as Saudi Aribia cut its production more than required allowing OPEC to meet 96% of its goal in Q1 2017. While Q1 production cuts were largely met, the U.S. oil shale production in full swing putting a dampener on OPEC’s efforts in controlling global supply.
OPEC members are set to meet on Thursday, May 25th in Vienna to determine the future of global product cuts.
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