December 12, 2016
The oil production deal OPEC cut with Russia could draw down the world’s oil surplus by roughly half within six months. OPEC and 11 other oil producers pledged to cut supplies, ultimately removing 46% of the 300-million-barrel stockpile, which has accumulated to record levels since 2014.
To achieve that goal would require fulfillment of the nearly 1.8-million-barrel cut promised. Reaching a crude-supply deficit of 760,000 barrels a day in the first half of 2017 means OPEC must fully implement its 1.2-million-barrels-a day cut. Russia pledged to gradually trim output by some 300,000 barrels a day.
Exempt members, such as Libya and Nigeria, may stand in the way of reaching that goal, since they could increase production.
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