Oil prices gain ground as the OPEC policymakers are quite optimistic about output cuts. Oil extended its profit after the cartel’s Secretary General had summed up the first month’s results of the agreement implementation.
The cartel members and 11 non-OPEC states signed an agreement on curbing the oil production by 1.8 million barrels per day starting from January 1, 2017. Market participants were skeptical about OPEC’s intentions to cut output, bearing in mind that producers were reluctant to fulfill their obligations before. However, this time things changed for the better. Reportedly, the Organization of Petroleum Exporting Countries implemented 90 percent of promised output cuts which is a great result. A high level of commitment provides strong support to oil prices.
Secretary General of OPEC Mohammed Barkindo has a positive view on the current developments. He is confident that the producers will continue reducing output. At the same time, the cartel’s head expressed no concerns over rising production and exports in the US and Russia despite the fact that the oil market remains imbalanced. Mr Barkindo believes the primary goal at the moment is to stick to the agreement. It will help the cartel to attain the final aim – to equalize the supply and demand.
