Members and non-members of the Organization of the Petroleum Exporting Countries decided to expand their plan to reduce the production of oil in the world. As this impacts usually the course of the black gold and the currencies of the forex correlated, we propose to you to decipher this important meeting today.
Back on the meeting
Last November, members and non-members of OPEC have decided to put in place a plan to reduce the daily production of oil. From January 2017 and 6 months, all countries are committed to limit the production of 32.5 million barrels per day. At that time, they had already the idea to extend this agreement for an additional six months depending on market conditions and prospects.
We are now at the end of the month of may and the results of that effort have not enabled a rebalancing of a significant market. The price of crude oil has not improved significantly. Without surprise, during this new meeting, the members and non-members of OPEC have therefore extended the agreement of reduction for a period of nine months.
How oil prices have responded ?
With the speeches of the various members and non-members of OPEC and the extension of the reduction of the production of nine months, it was expected that the markets greet the news positively, however, this was not the case. In fact, the main actors have been disappointed as many of them expected a greater reduction or an extension of the measure aimed at reducing the production of 12 months.
With this, the price of oil has still fallen. They save their slide as the most important since the beginning of march. Currently a gross lie 51,46 per barrel.
And now ?
If the new measure «makes the case» as seems to think the majority of people present at this meeting of OPEC, the major oil producers could put some colour in 2018.
The problem, however, remains that the current plan doesn’t make the stability of the price unless OPEC introduces a kind of exit strategy. The organization has even stated that she would do everything necessary to achieve the rebalancing of the market.