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OPEC countries may cheat on their production quota - expert

Oil&Gas Materials 1 December 2016 13:37 (UTC +04:00)
Having raised market expectations in previous meetings in Doha and Algiers, OPEC couldn’t afford a third meeting without reaching some definitive agreement.
OPEC countries may cheat on their production quota - expert

Baku, Azerbaijan, Dec.1

By Leman Zeynalova – Trend:

Having raised market expectations in previous meetings in Doha and Algiers, OPEC couldn’t afford a third meeting without reaching some definitive agreement, according to an energy expert.

Now the pressure will be on for those non-OPEC countries that claim to be cooperating with OPEC, such as Russia, to cut or freeze their production, Edward Chow, a senior fellow in the Energy and National Security Program at the Center for Strategic and International Studies (CSIS), told Trend, commenting on the results of OPEC's Vienna meeting.

During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day.

The decision was made in order to accelerate the ongoing drawdown of the stock overhang and bring the oil market rebalancing forward.

“OPEC says it expects 600,000 barrels per day cut from non-OPEC countries. The historical record is not promising that this will happen,” said Chow. “This may be used by OPEC countries to cheat on their production quotas as we have seen in the past.”

The hope is that the oil supply and demand will come into better balance in 2017, said the expert, adding that he expects oil to be in a trading range of $40 to $60 for quite a while.

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