Oil in Global Economy Series: OPEC Production down by 751,000 barrels in December

Since November 2016, when OPEC members agreed to cut production for the first time since the Great Recession, to the tune of 1.76 million barrels per day, it became a cornerstone for the oil market and one the key factors for the recent bullish oil market.

And recently, OPEC once again struck a deal along with Russia, which would reduce global oil supplies by 1.2 million barrels per day.

The price actions also suggest the same whenever news on the agreement hits the market. The latest decline in oil price was triggered by increasing oil supplies in the market and a weaker outlook for global demand. However, oil price halted decline as OPEC+ reached the above agreement.

WTI is currently trading at $51.2 per barrel and Brent at $60.3 per barrel premium to WTI.

• According to data from secondary resources, the OPEC remains more than compliant with the agreement on an average production basis. However, the production has increased substantially since May. But after OPEC and Russia reached a new agreement last year, the production has been in decline.
• It is important to note that overall production from OPEC including the exempted members like Nigeria, and Libya declined for the second time in eight months.
• Venezuela continues to see its production dwindling.
• Libyan oil production dropped below million barrels.