Oil Tumbles After OPEC Ends With A Whimper; Agrees Only To Nine Month Extension
Two delegates say: consensus reached for 9 month extension #OOTT #OPEC but other items on addenda
— Amena Bakr (@Amena__Bakr) May 25, 2017
zerohedge.com / by Tyler Durden / May 25, 2017 6:44 AM
The OPEC Vienna meeting has not officially concluded just yet, but moments ago a delegate told the WSJ and Reuters that the oil producing cartel had decided to do what had been widely telegraphed previously, and merely extend output cuts by nine months to March 2018. While the full quota breakdown has not been released yet, the cuts are likely to be shared again by a dozen non-members led by top oil producer Russia, while several nations like Iran and Nigeria will remain exempt from production caps.
OPEC cuts had helped push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets, however in recent weeks oil dropped to the mid-$40s again, forcing OPEC to agree to the production extension in hopes of creating backwardation in the oil strip, in order to eliminate shale producers from the question. The rebound in oil prices has in turn spurred growth in shale output, which is not participating in the output deal and whose breakeven prices have tumbled, slowing the market’s rebalancing with global crude stocks still near record highs while US producers steal market share from Saudi Arabia and other OPEC members.
The post Oil Tumbles After OPEC Ends With A Whimper; Agrees Only To Nine Month Extension appeared first on Silver For The People.
Source: http://silveristhenew.com/2017/05/25/oil-tumbles-after-opec-ends-with-a-whimper-agrees-only-to-nine-month-extension/
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