Saudi Arabia’s energy minister has predicted production cuts by OPEC and non-OPEC countries will reduce global oil inventories by 300 million barrels by the middle of 2017. Six months of full compliance with the agreement would cut inventories to their five-year average and make any extension of the accord unnecessary, according to Khalid Al-Falih. Crude exporters have been talking up compliance with the pact over the last two weeks to validate market expectations and steady prices. But traders have become more wary as the initial surprise from the ambitious OPEC and non-OPEC deals fades and the market becomes more watchful. The focus has shifted to questions of compliance and the resurgence of shale production in the United States (“U.S. shale oil and gas sector surges back to life”, Reuters, Jan. 23). SOFTER SPREADS Spot crude prices have stalled since the middle of December and calendar spreads have been weakening […]