OPEC and producer countries outside the organization are discussing the extension of the program for reduced oil production for another three months after it expires in March 2018. Extending this program will only be necessary if the price does not reflect the current cuts in yield (1.8m barrels per day).
Despite all efforts, oil prices are over $50, mainly due to the rise of shale deposits in the United States.
Whether we will see a decision by OPEC and producer countries outside the organization for further cuts will be clear at a meeting scheduled for late November in Vienna, with the three-month extension being considered as a minimum. The length of this extension will depend on many factors, including the extent to which OPEC and its allies have agreed to the cuts, the pace of recovery in Libya and Nigeria, slate supply in the US, and the strength of global demand.
OPEC forecasts released on Tuesday show that even if oil demand rises next year, the organization will not be able to reverse the downward trend in prices. According to the organization, world demand will amount to 32.8m barrels per day or this is the yield reached in August this year. For this reason, more layoffs are needed to help increase the price.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
Bloomberg: OPEC Discusses Extending Oil Cuts by More Than Three Months
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