While 2016 was the year of the OPEC for the oil market, there are several factors beyond OPEC which would have a profound impact on the oil market and the oil price. Below are the key factors that would be decisive-

• US Shale would be one of the biggest factors that one would have to account for while forecasting oil price. With the recovery in price, the production from the United States has recovered by 338,000 barrels per day from its bottom in July 2016. A further rise in prices could see production revive by as much as a million barrels.
• Libya and Nigeria, two exempted nation from the OPEC deal could ramp up production by as much as 500,000 barrels per day. Libya would do its best to reopen the closed production sites and export terminals and Nigerian government would try to make peace with the rebels at oil reach delta of the country.
• Demand would play a critical role in 2017. Two nations; India and China which accounted for most of the incremental demand in 2016 facing problems of their own. China is facing a slowdown in economic activities, while the demand in India could suffer from the recent de-monetization drive. International Energy Agency has projected a demand increase of 1.3 million barrels per day, lowest in years.
• Global inventories, which are at the highest level in decades could be the key barometer of the effectiveness of the OPEC and NOPEC deal. Continued buildup would undermine the positive sentiment from the deals.
• Dollar’s strength since Donald Trump’s victory in November has been a key factor suppressing the oil rally in 2016 and a further rise would keep the commodity under pressure.
• Hedge funds and money managers would continue to add volatility in the oil price with their biggest long position buildup since 2014.