Industry information

Why global oil production looks set to grow in 2018, despite OPEC-led output cut

Pub Date:Jun 06, 2017    |    Views:169    |    

From Marketwatch : Global crude-oil production looks set to rise next year, and not just because of growing U.S. output.

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Less than two weeks after the Organization of the Petroleum Exporting Countries reached an agreement with some non-OPEC oil producers to extend oil production cuts through March 2018, compliance with the pact, and maybe even the agreement itself, appears to be tenuous.

Russia has voiced concerns about loss of market share in oil to the U.S., and President Donald Trump’s decision to pull out of the Paris climate agreement could help ease restrictions on the fossil fuel sector, potentially contributing to more oil production.

Contributing to concerns, three Persian Gulf countries on Monday dissolved diplomaticties with Qatar.

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All of that has helped to rattle confidence in the output-cut pact, which has so far failed to lift CLN7, -0.17% LCOQ7, -0.18%  year to date—and traders are already worried about what happens when the deal expires.


“There is definitely some very forward speculation going on regarding what will happen when the OPEC deal is done, but also that the deal may not be nearly as effective as [OPEC/non-OPEC] leadership is hoping,” said Tyler Richey, co-editor of the Sevens Report.


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