The cartel promised in November to cut output to help prop up prices. Under the deal, Saudi Arabia agreed to cut output by 486,000 barrels per day (bpd), or 4.61 percent of its October output of 10.544 million bpd, Reuters reports.
Investors have been suspicious that OPEC may not cut as much as promised, but several sources told Reuters on Thursday the world’s biggest oil exporter intended to lower exports to comply with the OPEC reductions.
“There remains a question mark over whether OPEC, with a long history of non-compliance, will actually follow through (with the cuts). Very few respondents expect full compliance,” Singapore Exchange (SGX) said, citing results from a survey of its participants.
“Three-quarters of those surveyed went for (crude) prices averaging within the current $50-$60 a barrel range (for 2017),” SGX added.
Analysts at Goldman Sachs said even if OPEC reduced production as promised, there was “only moderate oil spot price upside given the expected supply response to higher oil prices and new production”. The U.S. bank said it expected Brent prices to peak at $59 a barrel by mid-2017.
