Oil prices may not be posed to rise in 2017. The effect of reduction of oil production by OPEC countries and Russia and collapse in China’s oil production may be mitigated by growing oil production in non-OPEC countries such as Libya, Iran, Iraq and Algeria, as well as the increase in US shale oil output. Russia is also planning to increase the oil production after the six month OPEC/Russia agreement expires.
Oil prices were little changed on Tuesday as forecasts for record production out of Russia in 2017 helped offset earlier gains related to a decline in the U.S. dollar and Saudi Arabia saying it would adhere to OPEC’s commitment to cut output.
Earlier gains were capped by forecasts for rising U.S. and Russian production and scepticism that the Organization of the Petroleum Exporting Countries (OPEC) as a whole would comply with its commitment to reduce supplies.
Under the agreement, OPEC, Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption. (Reuters – full article)
Oil prices are set to fall later this year despite the recent OPEC agreement to limit production …
The oil cartel’s production cut last year gave a boost to prices as it limited supply, but … other countries — most notably the U.S. — will simply step in to fill the void and depress prices, he predicted.
“At the end of the day, we are definitely going to see more oil coming from the United States … We will see a bit of a zigzag and we will see a greater volatility of the prices.” (CNBC – full article)