OPEC members, non-members agree on Output cuts

“Usually non-OPEC would raise their production to compensate for voluntary cuts by OPEC”.

Ministers will hold an informal dinner Saturday evening before gathering at OPEC headquarters for the first official meeting of the monitoring committee Sunday morning, according to people familiar with the matter, who asked not to be identified because the agenda isn’t public.

If President Trump were to follow through with his vow to free America of OPEC imports, some 3 million bpd must come from non-OPEC producers: an unlikely development in the near term.

“The deal is a success …”

And Saudi Arabia’s energy minister Falih put the increase in USA shale output at around 200,000 bpd this year in a recent interview.

“Now, we are seeing voluntary cuts by both sides”, Falih said.

He added that he hoped all countries would reach full compliance next month and forecast that brimming global oil stocks would return to normal levels by mid-year.

Brent crude, the worldwide benchmark for oil prices, had dropped 15 cents, or 0.3 per cent, to $55.29 a barrel by 0228 GMT. If too much US oil comes online, like it did between 2005 and 2014, it could lead to oversupply and act as a cap to how high prices can go. “The price recovery is helping USA companies, the U.S. industry, the United States economy”.

Firmer data on OPEC production will be delayed by a few months.

But the surge in oil prices as a result of the OPEC and non-OPEC production cuts has given shale drillers more confidence and more cash flow.

Data from Baker Hughes showed the number of working oil rigs in the US climbed by 29 to a total of 551 pointing to a potential rise in oil production.

Hedge funds also increased their net long position in US natural gas by the equivalent of 280 billion cubic feet to 3.042 trillion cubic feet in the week to January 17.

Oil prices gained traction over the weekend after Saudi Arabia’s energy minister, Khalid al-Falih, said the 20 nations that have agreed to rein in output are showing “very good compliance.” .

Qatari Energy Minister Mohammed Al-Sada said with increasing demand “shale oil will all be catered for”.

“Oil is trading in a range”.

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One factor in oil prices that often goes overlooked is the dollar’s impact.