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.  

According to "Fuel Oil News'" the October issue states that fuel inventories are plentiful going into the season.  Experts weigh in on what exactly this means.  As always, this market is unpredictable and their comments shouldn't be used as a guide to making any purchases.  

• Alan H. Levine, CEO and chairman of Powerhouse says the large quantities of crude oil and distillate fuels will put something of a natural limit on the upside.  "I'd be very surprised if we could move much above fifty dollars a barrel", said Levine.  This abundance of inventory is due to the fact that the U.S. has been producing large quantities of crude oil.  Even though we are producing around one million barrels less per day, "we're still producing a huge amount..."  With last winter being as warm as it was and having a very large excess going into this season, the effect of the two will certainly put a damper on where prices might go.  Richard Larkin spoke about production in the U.S. and how the drop in price per barrel resulted in putting a halt on working fracking locations. Those with the lowest production costs- Saudi Arabia, Iran, Iraq- are "game to fight it out" in this context.  Amid a supply glut there is no doubt that the market is looking for a rebalancing, said Philip Baratz, President of Angus Energy.  Many analysts and authors of research reports are forecasting that it is 6-18 months away.