Global oil prices are poised to witness more volatility” in 2017 even though markets may rebalance in the first half of the year if output cuts eventually happen, the head of the International Energy Agency (IEA) said at the weekend.
The Organisation of the Petroleum Exporting Countries, OPEC, had agreed on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by independent producers such as Russia, Oman and Mexico.
Prices fell on Friday and ended the week 3 percent lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the economic health of the world’s second-largest oil consumer, China, after it reported the steepest falls in overall exports since 2009.
Data from the U.S. Energy Information Administration showed crude production rose notably last week, particularly in 48 southern states. Overall production was 8.95 million barrels per day (bpd) last week, the most since April of last year, Reuters reports.
The cartel and the independent producers are cutting supplies to remove a global glut and prop up prices, which at around $56 a barrel are half their level of mid-2014, hurting the revenue of exporting nations.
