Baku, Azerbaijan, Jan.23
By Leman Zeynalova – Trend:
The agreed cuts in oil production are unlikely to be implemented in full, according to the forecasts of the UK Capital Economics consulting company.
“OPEC does not have a good record on compliance. Previous caps on output have acted more as a floor than a ceiling,” said the company's analysis obtained by Trend.
Moreover, the consulting company is doubtful about the compliance of non-OPEC producers, saying that Russia reneged on a similar deal to cut output in 2001.
Nevertheless, assuming that the cuts are enacted in full, the oil market would fall into deficit in the first six months of this year, according to the analysts.
During a meeting in Vienna, Austria, on Nov. 30, 2016, OPEC members decided to implement a new production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the output by 558,000 barrels per day during the meeting held Dec. 10, 2016.
Eleven non-OPEC countries – Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan – agreed to reduce the oil output.
OPEC and non-OPEC countries pledged to start implementing the deal from Jan. 1, 2017 for six months, extendable for another six months.
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