OPEC: Deeper crude oil output cuts?

OPEC and its associated non-OPEC producers’ decision in May to extend their production cuts for an additional nine months through to end-March 2018 has not been met with overwhelming enthusiasm by the oil market. In fact, quite the contrary; the price of Dated Brent sunk from above $53/barrel in May to just $44.46/b June 23, although it has rebounded slightly in recent days to $46.47/b June 28. If this slump is sustained, it may prove enough to stem the rise in the US oil rig count, although it is too soon to see any impact. Yet this is hardly the dynamic that OPEC wished to set in motion. Related podcast:Saudi Arabia’s new crown prince and the outlook for the kingdom’s oil sector If the rise in the US rig count does stall, it will merely reaffirm the responsiveness of US shale production to the oil price. If OPEC decides further cuts are necessary, and prices firm again, there is little to suggest that US rigs will do anything other than return to the field. The number of US drilling rigs targeting oil rose by another 11 in the week ending June 23 to 758, according to Baker Hughes data, the

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Source: CTRM Center

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