The Dec. 10 agreement between OPEC and 11 other producers could begin to reverse three years of oversupply within the next six months, according to the IEA, Paris-based adviser to 29 industrialized nations. The Organization of Petroleum Exporting Countries itself is less hopeful, predicting that stockpiles won’t fall until the second half of 2017. Khalid Al-Falih, energy minister of OPEC’s biggest and most influential member, Saudi Arabia, was less precise than either institution on Wednesday, saying that he sees supply and demand aligning at some point this year without specifying when. For the Energy Information Administration, a unit of the U.S. Energy Department, that may still be too soon. The EIA’s latest market outlook on Dec. 6 projected that inventories will accumulate by an average 420,000 barrels a day next year. click Read More below for more of the story
Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a reduction in Canadian supply.
The Middle East-dominated Organization of the Petroleum Exporting Countries will meet on Thursday in Vienna to agree future output and will discuss strategy with other producers outside OPEC, including Russia.
OPEC and its allies are working towards a deal to reduce output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to Russia about the extent of its production cuts.
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