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Opec and 11-non Opec countries must now begin the process of cutting output by around 1.8mn b/d under agreements made last month. The agreements came into effect on 1 January, but key producers exited 2016 at near-record highs, highlighting that the process of cutting is set to be gradual. There remain serious questions regarding compliance, and if this is seen as insufficient then price gains that saw Brent rise from $46/B on 29 November to nearly $57/B as MEES went to press will be reversed.
Opec crude production in 2016 smashed the previous year’s record 32.39mn b/d by 810,000 b/d to reach 33.20mn b/d. Output in December edged down from November’s record 34.13mn b/d, but the 33.97mn b/d it posted still marks the second highest month on record. This leaves it nearly 1.5mn b/d above the 32.5mn b/d target agreed on at the 30 November Opec meeting in Vienna (MEES, 2 December 2016).
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