Why OPEC’s oil production cut is a ‘gift to U.S. producers’

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Members of the Organization of the Petroleum Exporting Countries are sticking to their agreement to curb oil output, but prices for crude have lost ground so far this year thanks to signs of further growth in U.S. output.

U.S. production not only threatens to undermine efforts by OPEC and other producers to ease the global glut of crude, but concerns over the threat of losing market share to North American producers could also undermine future cooperation within the cartel.

So far, “traders have been surprised by larger January OPEC output cuts than initially expected,” said Tyler Richey, co-editor of The 7:00’s Report.

In a monthly report released last week, the International Energy Agency said output from OPEC members was down by about 1 million barrels a day from the group’s October baseline to 32.02 million barrels a day.

Read more : Market Watch, 15.02.2017