Oil in Global Economy Series: Ecuador to ask for no exemption at OPEC meeting

In July this year, Ecuador energized the oil bulls with an announcement that it is going to opt out of the OPEC agreement and become the first country to move out the agreement which was forged in November 2015 with an aim to reduce global oil supplies by 1.76 million barrels per day. While Ecuador’s moving out alone mattered less due to small production of 0.53 million barrels per day, bets were that others would follow suit. However, that has not happened and now, Ecuador is announcing that it would continue to be a part of the agreement.

According to official communications by the country’s oil minister Carlos Perez Ecuador has temporarily shelved its idea of opting out largely due to a sharp increase in oil price. The global oil benchmark Brent crude reached $65 per barrel this month, which is the highest level for the benchmark since June 2015. The oil minister said, “For now we are not going to submit the request. We’ll analyze along with OPEC’s members which alternatives they can offer. For sustaining prices, we have to support OPEC’s measures, which are so far succeeding”.

WTI is currently trading at $56.1 per barrel and Brent at $6 per barrel premium.