OPEC to cut production
Jan 1, 2017 marks the start of OPEC's recently accepted plan to cut oil output by 1.2 million barrels/day, 1.8 million b/d with the help of Russia for the first 6 months of 2017. This is the first hault in production of this magnitude since 2008. With OPEC's hope of rebalancing the market, U.S. shale production had been predicted to increase. That is just what seems to be happening. Industrial service company, Baker Hughes reports that U.S. oil producers added two oil rigs this past week (Keitz). That brings the count up to 525 oil rigs in the U.S. Some speculate with a cut in production, prices of crude could be up to $60/barrel in little as a few weeks. Others argue that OPEC will fail to reduce their production to the extent of the agreenment. OPEC members are consistently boosting their production even admist all the talk of production cuts.
Keitz, Anders. "U.S. Oil and Gas Producers Boost Rig Count Ahead of OPEC Production Cuts." TheStreet. TheStreet, 30 Dec. 2016. Web. 01 Jan. 2017.
"OPEC Reaches a Deal to Cut Production." The Economist. The Economist Newspaper, 03 Dec. 2016. Web. 01 Jan. 2017.
Fitchburg Economy Oil
David A. Champa