FINANCE & ECONOMICS
How Oil Producers are Balancing Unsteady Markets
The international oil benchmark, Brent Crude, fell from a peak of $115 per barrel in June 2014 to as low as $27 in January 2016.
This necessitated the Organisation of Petroleum Exporting Countries (OPEC) to forge alliances with other willing crude oil producers, led by Russia, to erode a global supply overhang that has persisted for two years. OPEC and non-OPEC producers struck a deal reducing output by 1.2 million barrels per day (bpd) starting January 1, 2017 for six months.
“Currently, more than 94 million barrels of oil are produced and consumed every day.”
Thereafter, the group agreed to further extensions until first half of 2019. Prices responded to the deal. It rose to around $66.87 per barrel at the end of 2017 from around $53 at the beginning of the year. The rally in oil prices continued into 2018, with Brent hitting a four-year high of $86.74 per barrel in October.
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