4 Factors That Could Derail The OPEC Deal

9 Jan 2018   Prices

OPEC and its Russia-led non-OPEC allies in the deal managed to stay together for a full year of high compliance with the oil production cuts and have agreed to extend the pact for a second year to the end of 2018. This year, however, the cartel and friends face even more challenges in sticking together until the end of the December, with both supply and demand uncertainties adding to the unknowns. On the one hand, within the cartel, possible production slumps from two OPEC members could trigger an early exit. Another internal OPEC factor could be the ever-present possibility that some members may cheat on the production cut deal outright now that oil prices are higher. On the other hand, factors outside OPEC’s control, such as U.S. shale production expansion and potentially strong global oil demand growth, could also spell the end of the production pact. OPEC could see […]

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