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The current output deal between Opec and 10 non-members is set to expire in March, and it is looking increasingly probable that an extension will be agreed upon this month in Vienna. But participants should perhaps consider trimming each country’s production allocation to dampen recent price gains.
Oil prices have posted four consecutive monthly gains. But the price rally looks far from secure despite Qatari Energy Minister Muhammad al-Sada saying on 29 October that the market is heading to a fair price. With Brent already in the mid-$60s/B, the temptation to push towards $70/B is understandable, but could prove counterproductive. Even prices at current levels look sufficient for rival US producers to boost output, potentially precipitating another price fall and eating into Opec’s market share. (CONTINUED - 1584 WORDS)
DATA INSIDE THIS ARTICLE
|chart||1: Opec Basket At $4/B Premium To Wti, 5-Year Low Discount To Brent ($/B, Monthly Average Prices*)|
|table||Opec Wellhead Production, October 2017 (Mn B/D, Mees Estimates)|
|chart||2: Anadarko Gross Algeria Output* Falls To Near 4-Year Low In Q3, Set For Further Fall In Q4 With 40-Day Planned Outage ('000 B/D Inc Ngls)|