Pacific Money

The Global Oil War Rages On With OPEC Cut Deal Extension

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Pacific Money

The Global Oil War Rages On With OPEC Cut Deal Extension

OPEC and major non-OPEC producers agreed to extend the December 2016 production cut deal through 2018.

The Global Oil War Rages On With OPEC Cut Deal Extension
Credit: Pixabay

Last week, OPEC and non-OPEC major oil producers agreed to extend production cuts that have prompted the recovery in oil prices through the end of 2018. With the cuts in place, oil prices have risen to above $60 per barrel from early 2016’s low of below $30. But as oil prices rise, market watchers are concerned that U.S. shale production will again hit a stride capable of knocking the entire Saudi Arabian-led market off kilter.

In December 2016, OPEC and major non-OPEC oil producers reached their first deal to cut production since 2001. The 13 OPEC countries agreed to cut output by 1.2 million barrels per day (bpd), with Libya and Nigeria exempted. Eleven non-OPEC countries — Azerbaijan, Bahrain, Bolivia, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan — made commitments to cut production by 1.8 million bpd among them.

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